A natural personal account represents accounts belonging to human beings. For example, accounts of debtors, creditors, capital, or drawings are all considered natural personal accounts.
According to the reference: "Natural Persons are human beings. Therefore, we include the accounts belonging to them under this head. For instance, Debtors, Creditors, Capital A/c, Drawings A/c, etc."
Here's a table summarizing examples of natural personal accounts:
| Account Type | Description |
|---|---|
| Debtors | Individuals or entities that owe money to the business. Representing the personal accounts of those who have purchased goods or services on credit. |
| Creditors | Individuals or entities to whom the business owes money. Representing the personal accounts of suppliers or lenders to whom the company has an outstanding debt. |
| Capital A/c | Represents the owner's investment in the business. This account is directly linked to the proprietor (in the case of a sole proprietorship) or partners (in the case of a partnership), reflecting their personal financial stake in the enterprise. |
| Drawings A/c | Represents the amount of cash or assets withdrawn by the owner(s) from the business for personal use. This is a deduction from the capital and thus, reflects a transaction from the owner's personal funds. |
In summary, natural personal accounts are records of financial interactions related to human beings within a business context.
