Real A/c is an account to highlight the movement of the assets. If any simultaneous
movement is taking place in between two different assets of the enterprise can be
explained with the following example:
Purchase of a Plant and Machinery of Rs.15,000.
The purchase of a plant and machinery is only through cash payment to the vendor.
What are the two different type of assets involved in the movement during the purchase?
There are two different type of assets viz. Cash and Plant & Machinery
To put in nutshell, among the two assets, Cash is one of the current assets and the Plant
& Machinery is one of the fixed assets. In general, these two are brought under the
category of assets or applications of the firm.
Debit the Receiver Bank Debit the Melvin A/c
Credit the Giver Sundar Credit the Sundar A/c
Mr. Sundar Bank
Personal A/cs
Persons of Nature
Giver Receiver
If the assets are involved in the transaction, Real account should only be referred. Financial Accounting
How the movement of assets is taking place at the moment of purchase ?
The movement of the assets classified into two segments viz. movement in and movement
1.9.1 What is movement - in?
The movement - in is the movement of the assets to the business enterprise. With reference
to above cited example which asset is coming into the business enterprise? Plant &
Machinery is the asset which comes into the business enterprise only at the moment of
1.9.2 What is movement - out?
The movement-out is the movement of the assets from the business enterprise. From
the above illustrated example, which asset is going out of the firm during the purchase?
Cash resources are going out of the firm in order to make the payment of the purchase
to the supplier of the assets.
Cash Resources
Plant & Machinery
Next stage is to highlight the movement of the assets during the purchase
What is coming in ?- Plant & Machinery
What is going out ?- Cash Resources
Plant & Machinery A/c Dr Rs.15,000
To Cash resources A/c Cr Rs.15,000
(Being Plant & Machinery is purchased)
What is the basic point to be registered ?
During the purchase, the plant & machinery worth of Rs.15,000 is coming into the firm,
in turn Rs.15,000 worth of cash resources are going out of the firm. During the cash
purchase, the assets are moving from one entity to another viz. from business enterprise
to supplier and vice versa.

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