The account which refers to the tangible assets of a company that is of permanent nature is the ___
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Correct Answer: Option B
Explanation:
A Real Account is an account that deals with the assets and properties of a business, both tangible (like buildings, furniture, land) and intangible (like goodwill, patents). These accounts are permanent in nature, meaning their balances are carried forward from one accounting period to the next.
Why this is the correct choice:
Tangible assets like land, buildings, machinery, and equipment are permanent and are recorded in real accounts.
Real accounts do not close at the end of the accounting year - their balances continue to exist.
Golden Rule for Real Accounts:
"Debit what comes in, Credit what goes out."
A Real Account is an account that deals with the assets and properties of a business, both tangible (like buildings, furniture, land) and intangible (like goodwill, patents). These accounts are permanent in nature, meaning their balances are carried forward from one accounting period to the next.
Why this is the correct choice:
Tangible assets like land, buildings, machinery, and equipment are permanent and are recorded in real accounts.
Real accounts do not close at the end of the accounting year - their balances continue to exist.
Golden Rule for Real Accounts:
"Debit what comes in, Credit what goes out."