Real Accounts and Golden Rules of Accounting
The real accounts are permanent accounts as they exist and continue to carry the previous years balances until and unless the organization or business is liquidated or the account of a particular asset, liability or equity is removed or settled.
The golden rule of accounting is also applicable for real accounts. The rule is “DEBIT what comes in and CREDIT what goes out”.
Using a real account, an organization should debit the account when something come into the organization such as assets. Similarly, the organization should credit the real account when something goes out from the organization such as liabilities.
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