Real Account
Rule – “Debit What Comes in, Credit What Goes out”
All the accounts whose value can be measured in monetary terms whether tangible or intangible which belong to the business are called Real Accounts. There are two types of real accounts:
- Tangible Real Accounts: The real accounts which can be touched, felt, measured, purchased, and sold. For example, Cash A/c, Stock A/c, Furniture A/c, Machinery A/c, etc.
- Intangible Real Accounts: The real accounts which can not be touched but their value can be measured in terms of money. For example, Goodwill A/c, Patent A/c, Copyright A/c, Trademark A/c Etc.
The rule specifies that any real account which comes into business is debited and any real account which goes outside the business is credited.
3 Golden Rules of Accounting – Types, Examples & more
Accounting is the process of measuring and recording all the financial transactions that happen in a financial year. It includes summarizing, analyzing, and recording the data. It helps in getting a clear picture of the financial position of the business by seeing the value of a company’s assets and liabilities.
Identifying and systematically recording accounting transactions in the appropriate books of accounts is known as bookkeeping. The Golden Rules of Accounting serve as the basis for recording all business transactions.
In this article, we will discuss the three Golden Rules of Accounting along with their types and examples.