Question

A _______ account is a general ledger account relating to Assets and Liabilities other than people accounts.
1. Personal
2. Cash
3. real
4. Credit

Answer 1

Correct Answer - Option 3 : real

The correct answer is real.

• A Real Account is a general ledger account relating to Assets and Liabilities other than people accounts.
• A real account is an account that retains and rolls forward its ending balance at the end of the year.
• In other words, the balances in the real accounts are carried over to become the beginning balances of the next accounting period.
• Some of the examples of real accounts are:
  • Asset accounts (cash, accounts receivable, buildings, etc.),
  • Liability accounts (notes payable, accounts payable, wages payable, etc.),
  • Stockholders' equity accounts (common stock, retained earnings, etc.)

• An account is an outline of the transactions undertaken by the business in respect of persons, their representatives, and things.
• Types of Accounts:
  • Personal Account: Personal Accounts are the ones that are related to individuals, companies, firms, groups of associations, etc.
  • Real Account: Real Accounts are the ones that are related to properties, assets, or possessions.
  • Nominal Account: Nominal Accounts relate to income, expenses, losses, or gains. These include Wages A/c, Salary A/c, Rent A/c, etc.