BonnieCurious In: 1. Financial Accounting > Accounting Terms & Basics Is capital a real account? Is capital a real account? Share Facebook You must login to add an answer. Username or email* Password* Captcha* Remember Me! Forgot Password? Need An Account, Sign Up Here 1 Answer Voted Recent Ayushi Curious Pursuing CA 2021-10-08T05:55:17+00:00Added an answer on October 8, 2021 at 5:55 am This answer was edited. No, capital account is not a real account. Capital account represents the amount of money invested by the owner/owners of the business along with the retained earnings net of drawings or dividends. Capital account has a natural credit balance because it is an internal liability of the business. Capital account is a personal account because, as discussed above, it represents the investment of the owner or owners. Personal account represents person or persons. Whereas a real account represents the material assets of a business. Example:- Cash A/c, Fixed assets A/c etc. That’s why the capital account is not a real account. Being a personal account, the following golden rule of accounting applies to capital account:- “Debit the receiver and credit the giver” Here, as the owner gives an amount as an investment into the business (owner and the business are separate entities), the capital account has a credit balance. 0 Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Related Questions What are some examples of deferred revenue expenses? Are brands intangible assets? What comes in debit side of Realisation account? What is recorded in the Realisation account? What is not included in Realisation account? What is recorded on the credit side of a Realisation account? Can accounts payable have a debit balance?