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Difficulty: EasyLedger Classification and Double Entry Rules

Complete the statement below regarding ledger classification and double-entry posting rules by filling in the blanks with the appropriate accounting terms.

Answer:In double-entry bookkeeping, accounts that record tangible physical assets such as premises and machinery are classified as 【real】 accounts, and an increase in these asset values is posted to the 【debit】 side.

Answer

The first blank is 'real' (or 'Real') and the second blank is 'debit' (or 'Debit').
Real accounts contain property and tangible assets of a business firm (such as premises, motor vehicles, and machinery). Under the rules of double-entry bookkeeping, any increase in an asset is recorded on the debit side of its respective ledger account.

Step-by-Step Solution

1
Identify the ledger account classification for physical property and assets
Accounts representing physical property and tangible assets (e.g., machinery, equipment, buildings) are classified as real accounts.
Real accounts track possessions and physical properties owned by the business enterprise.
2
Apply the double-entry rule for asset increases
An increase in an asset value is recorded on the debit side of the account.
The basic rule of double entry states: Debit what comes in / increases in assets, and Credit what goes out / decreases in assets.

Key Concept

Classification of ledger accounts (Personal, Real, Nominal) and basic double-entry posting rules for assets.
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Ledger Classification and Double Entry Rules

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