Realisation account is a nominal account that is used to record the gains and losses made during the liquidation of a business. It is created to calculate the profit or loss made by a company when it sells all its assets and settles all its liabilities.



Although realisation account is a nominal account, assets are debited and liabilities are credited in this account. This is because the purpose of creating a realisation account is to determine the profit or loss made during the liquidation of the business.

When an asset is sold, the proceeds are credited to the realisation account. This is because the money received from the sale of assets is considered as income for the business. Similarly, when a liability is paid off, the payment is debited to the realisation account. This is because the payment made to settle a liability is considered as an expense for the business.



The rules of nominal account state that all expenses and losses are debited while all income and gains are credited. However, this rule does not apply to realisation account. This is because the purpose of realisation account is to determine the profit or loss made during the liquidation of the business.

In the case of realisation account, the assets are sold and the proceeds are credited to the account, which is treated as income. Similarly, the liabilities are paid off and the payments are debited to the account, which is treated as expenses. In this way, the realisation account helps in calculating the profit or loss made by the business during its liquidation.



In conclusion, realisation account is a nominal account that is used to calculate the profit or loss made by a business during its liquidation. Although it is a nominal account, assets are debited and liabilities are credited in this account because the purpose of creating a realisation account is to determine the profit or loss made by the business. The rules of nominal account do not apply to realisation account as the purpose and nature of this account is different.

Realisation account is type of Real account because when we have assets we debit it and when we sold them we credit it as per the rule debit what come in credit what goes out