Explanation
Accounts recording transactions with a person or group of persons are known as personal accounts. These accounts are necessary, in particular, to record credit transactions. Personal accounts are of the following types:
1. Natural persons: An account recording transactions with an individual is termed as a natural persons' personal account. For e.g. Kamal's account, Mala's account. Both males and females are included in it.
2. Artificial or legal persons: An account regarding financial transactions with an artificial person created by law or otherwise is termed as an artificial persons' personal account. For e.g. Firms' account, limited companies' accounts.
3. Representative personal account: An account indirectly representing a person or persons is known as representative personal account. When accounts are of a similar nature and their number is large, it is better to group them under one head and open a representative personal account. For e.g. prepaid rent, outstanding wages etc.
Drawings are related to the account of an individual, i.e. proprietor's account which shows the amount withdrawn by the proprietor from the business for his/her personal use. Hence, it is classified as a personal account.
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