{"id":207685,"date":"2025-04-25T06:43:33","date_gmt":"2025-04-25T06:43:33","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=207685"},"modified":"2025-04-25T06:43:35","modified_gmt":"2025-04-25T06:43:35","slug":"which-of-the-following-is-an-example-of-a-real-account","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/04\/25\/which-of-the-following-is-an-example-of-a-real-account\/","title":{"rendered":"Which of the following is an example of a real account"},"content":{"rendered":"\n<p>Which of the following is an example of a real account?<\/p>\n\n\n\n<p>A. utilities expense<\/p>\n\n\n\n<p>B. sales revenue<\/p>\n\n\n\n<p>C. bad debt expense<\/p>\n\n\n\n<p>D. unearned revenue<\/p>\n\n\n\n<p>E. rent expense<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is: <strong>D. Unearned Revenue<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation (300 words):<\/h3>\n\n\n\n<p>In accounting, accounts are generally classified into three types: <strong>real accounts<\/strong>, <strong>nominal accounts<\/strong>, and <strong>personal accounts<\/strong>. Understanding the nature of these accounts helps in the proper classification of financial transactions and accurate preparation of financial statements.<\/p>\n\n\n\n<p>A <strong>real account<\/strong> (also known as a <strong>permanent account<\/strong>) is one that is <strong>not closed at the end of an accounting period<\/strong>. Its balance is carried forward to the next accounting period. Real accounts typically include <strong>assets, liabilities, and equity accounts<\/strong>, which are reported on the <strong>balance sheet<\/strong>.<\/p>\n\n\n\n<p>Let\u2019s evaluate the options:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A. Utilities Expense<\/strong>: This is a <strong>nominal account<\/strong>, specifically an <strong>expense<\/strong> account. Nominal accounts are temporary and are closed to retained earnings at the end of the period.<\/li>\n\n\n\n<li><strong>B. Sales Revenue<\/strong>: This is also a <strong>nominal account<\/strong>, a revenue account that is closed at the end of the period to calculate net income.<\/li>\n\n\n\n<li><strong>C. Bad Debt Expense<\/strong>: This is another <strong>nominal account<\/strong>, representing an expense related to uncollectible accounts receivable.<\/li>\n\n\n\n<li><strong>D. Unearned Revenue<\/strong>: This is a <strong>real account<\/strong>. It represents a <strong>liability<\/strong> because it is money received for goods or services not yet provided. Since it reflects a future obligation, it remains on the balance sheet until the revenue is earned. It is <strong>not closed<\/strong> at the end of the accounting period and is carried forward until the obligation is fulfilled.<\/li>\n\n\n\n<li><strong>E. Rent Expense<\/strong>: Like other expenses, this is a <strong>nominal account<\/strong> and is closed at the end of the accounting period.<\/li>\n<\/ul>\n\n\n\n<p>Therefore, <strong>Unearned Revenue<\/strong> is the correct answer as it is a <strong>real (permanent) liability account<\/strong> that remains open and continues into future periods until it is settled.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Which of the following is an example of a real account? A. utilities expense B. sales revenue C. bad debt expense D. unearned revenue E. rent expense The correct answer and explanation is : The correct answer is: D. Unearned Revenue Explanation (300 words): In accounting, accounts are generally classified into three types: real accounts, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-207685","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/207685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=207685"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/207685\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=207685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=207685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=207685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}