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Difficulty: MediumLedger Classification and Double Entry Rules

Which ledger account types correctly complete the statement below regarding the classification of accounting records?

Answer:In double-entry bookkeeping, rent paid and interest received are classified as 【nominal】 accounts, whereas office equipment and business premises are classified as 【real】 accounts.

Answer

Rent paid and interest received are nominal accounts, while office equipment and business premises are real accounts.
Nominal accounts record revenue, income, expenses, and losses (such as rent paid and interest received). Real accounts record physical assets and properties owned by the business (such as office equipment and premises).

Step-by-Step Solution

1
Classify rent paid and interest received based on accounting rules.
They are expenses and revenues, which fall under nominal accounts.
Nominal accounts deal with expenses, losses, gains, and revenues of a business enterprise.
2
Classify office equipment and business premises.
They are tangible property of the business, which fall under real accounts.
Real accounts represent assets and properties owned by the business entity.

Key Concept

Ledger Account Classification (Nominal vs. Real Accounts)
Estimated Time:1m 0s
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Topics

Ledger Classification and Double Entry Rules

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