How are account debited and credited under real account?
Answers
Answer:
Real accounts relate to the assets of a company, which may be tangible (machinery, buildings etc.) or intangible (goodwill, patents etc.)
Real accounts: Debit whatever comes in and credit whatever goes out.
Explanation:
Debits increase asset or expense accounts and decrease liability, revenue or equity accounts. Credits do the reverse. When recording a transaction, every debit entry must have a corresponding credit entry for the same dollar amount, or vice-versa.
Answer:
Simple dear first you have to follow the Real account rule i. e. " Debit what comes in Credit what goes out ".
As per this rule the assets coming into the business are to be debited and assets going out of the business are to be credited.
Explanation:
Assets: Assets are the properties or resources owned by the business. Cash in hand, plant and machinery, furniture and fittings, bank balance, debtors, bill's reeivable, are some examples of assets, Assets can be classified into tangible and intangible.
Tangible assets: These are the assets having physical existence, which can be seen and touched example: plant and machinery, cash etc.
Intangible assets: These are the assets having no physical existence, but their possession gives rise to some rights and benefits to the owners. It cannot be seen and touched example: Goodwill, patents, trademarks etc ...