Doubt related to the classification of accounts
This query is : Resolved
10 April 2019
Real account are the accounts which relate to tangible or intangible assets of the firm. So how could a reserve be treated as a real account.
10 April 2019
you need to first understand the difference between real and nominal accounts. Nominal accounts are closed at the end of the year whereas real accounts are carried forward to the balance-sheet. Any account that forms part of balance-sheet is therefore classified as real account. Reserve being one such account is classified as real account.
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