Final answer:
A permanent or real account in accounting is an account that records assets, liabilities, and equity. Examples of permanent or real accounts include Prepaid Insurance, Insurance Expense, and Supplies Expense.
Step-by-step explanation:
A permanent or real account in accounting refers to an account that records assets, liabilities, and equity. These accounts are not closed at the end of an accounting period and their balances are carried over from one period to another.
Both Interest Revenue and Supplies Expense are considered temporary or nominal accounts, as their balances are closed at the end of an accounting period. They reflect revenues and expenses incurred during the period and do not carry over their balances to the next period.
Permanent accounts are the accounts that carry their ending balances over to the next accounting period. These include assets, liabilities, and equity accounts. Prepaid Insurance is considered a permanent account as it represents a payment for insurance coverage that extends beyond the current accounting period and isn't expensed until the period in which the insurance applies. On the other hand, revenue and expense accounts, such as Interest Revenue, Insurance Expense, and Supplies Expense, are temporary accounts. These are reset to zero at the end of each accounting cycle during the closing process, with their balances transferred to permanent accounts, affecting the company's profits or losses.