Livestock Economics, Marketing and Business Management

REAL ACCOUNTS

• Real accounts may be of the following types.

Tangible real accounts

• Tangible real accounts are those which relate to such things which can be touched, felt, measured etc.
• E.g. Cash account, building account, furniture account, stock account etc.

Intangible real accounts

• These accounts represent such things, which cannot be touched, though they can be measured in terms of money.
• E.g. patient’s account, good will account etc.
• The rule is
  • Debit what comes in
  • Credit what goes out
• E.g. when furniture is purchased for cash, furniture account should be debited while the cash account should be credited