Examples of Real or Asset accounts

An asset is a lifeless thing. So, it cannot receive or give a benefit. It can only come into the business or go out of the business. Therefore, the account of an asset which comes into the business is debited and the account of an asset which goes out of the business is credited.

The rule for debiting and crediting real accounts may be explained with the help of the following examples:

1.Received interest Rs. 100.

In this transaction, the asset account involved is Cash Account. Cash comes into the business. So, Cash Account has to be debited.

2. Paid Bhaskar Rs. 200

In this transaction, the asset account involved is Cash Account. Cash goes out of the business. So, Cash Account has to be credited.

3.Sold Machinery to Rao Rs. 5000

The asset account involved in this transaction is Machinery Account. Machinery goes out of the business. So, Machinery Account has to be credited.

4. Bought furniture from Ahmed & Co. on credit Rs. 500
The asset account involved in this transaction is Furniture Account. Furniture comes into the business. Therefore, Furniture Account has to be debited.