Q.Classify the following accounts under the Traditional Approach, stating whether each is a Personal, Real, or Nominal account:

This exercise checks whether a student can apply the Personal/Real/Nominal test to real account names, not just recite the three definitions.

Each account is classified by asking whether it relates to a PERSON (Personal), a THING/ASSET (Real), or an EXPENSE/LOSS/INCOME/GAIN (Nominal).

1. Cash A/c — Real Account (Tangible). Cash is a physical asset that can be counted and held.
2. Ram's A/c — Personal Account (Natural). Ram is a human being with whom the business deals.
3. Building A/c — Real Account (Tangible). Building is a physical, tangible asset of the business.
4. Salary A/c — Nominal Account. Salary is an expense incurred by the business, closed to the Profit and Loss Account each year.
5. Outstanding Rent A/c — Personal Account (Representative). It represents the landlord to whom rent has become due but is not yet paid — a Representative Personal Account, even though it is not named directly after the landlord. …

A quick test: does the account name a PERSON/institution (however indirectly, as with Outstanding Rent) → Personal. Is it a THING the business owns, touchable or not → …

Students frequently misclassify "Outstanding Rent A/c" or similar accounts (Prepaid Insurance, Accrued Commission) as Nominal, because the word "Rent" or "Insurance" sounds like an expense — but an OUTSTANDING or PREPAID item repr …