Real account

Real account – the Company Law establishes the real account as an account of liabilities, assets, and capital. This is not an account of payments and receipts. Each company has such an account, which does not close at the end of the financial year. It is moved from year to year. Usually, the balance in the account at the end of the fiscal year is the starting balance at the next year. Therefore the balance in this account balance does not participate in the income statement sheet of the company.

Retained earnings is an example of such account.

Synonyms are also “proprietary account” and “permanent account”.

See also “Corporate finance”

Real Account / Legal Glossary

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