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Question
_________ represents assets and properties which cannot be seen, touched or felt but they can be measured in terms of money.
_________ represents assets and properties which cannot be seen, touched or felt but they can be measured in terms of money.
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Solution
The correct option is A Intangible real accounts
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.
1. Tangible real accounts: These accounts represent assets and properties which can be seen, touched, felt, measured, purchased and sold. For e.g. Machinery account, Cash account, Furniture account.
2. Intangible real account: These accounts represent assets and properties which cannot be seen, touched or felt but they can measured in terms of money. For e.g. Patents account, Goodwill account.
The rule for Real accounts is: Debit what comes in; Credit what goes out.
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.
1. Tangible real accounts: These accounts represent assets and properties which can be seen, touched, felt, measured, purchased and sold. For e.g. Machinery account, Cash account, Furniture account.
2. Intangible real account: These accounts represent assets and properties which cannot be seen, touched or felt but they can measured in terms of money. For e.g. Patents account, Goodwill account.
The rule for Real accounts is: Debit what comes in; Credit what goes out.
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