Question

Patents account is a ___________.

• A. Personal account
• B. Real account
• C. Nominal account
• D. None of the above

Answer 1

The correct option is B Real account

Accounts relating to properties or assets are known as "Real Accounts". A separate account is maintained for each asset e.g. Cash, Machinery, Building, etc. Real accounts can be further classified into tangible and intangible.

Intangible real accounts represents assets and properties which cannot be seen, touched or felt but can be measured in terms of money. For e.g. Goodwill account, Trademark account, Patents account.

Patent account is an intangible asset and hence, is classified as a real account.