Test Your Fundamental!!!
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 January 2011
We consider Purchase A/c as Nominal A/c.....It is True also According to one of the expert of CACLUB
but if we think nicely then we can say that, to prove this as real a/c, we have the backup (since it represents the stock and stock is our Asset and it is coming in our business)
But when we say it is Nominal a/c what is the backup there................except one thing that we will be using Trading A/c to close this a/c that is why it is Nominal (as all the Nominal a/c is closed by Either Trading or Profit & Loss A/c)........
Rest I am leaving on you......EXPERT JI !
but if we think nicely then we can say that, to prove this as real a/c, we have the backup (since it represents the stock and stock is our Asset and it is coming in our business)
But when we say it is Nominal a/c what is the backup there................except one thing that we will be using Trading A/c to close this a/c that is why it is Nominal (as all the Nominal a/c is closed by Either Trading or Profit & Loss A/c)........
Rest I am leaving on you......EXPERT JI !
Ram Avtar Singh
(Expert)
11 January 2011
Nominal Account Definition
Revenue or expense account that is a subdivision of the owners' equity account, and which is closed to a zero balance at the end of each accounting period. It starts with a zero balance at the beginning of a new accounting period, accumulates balances during the period, and returns to zero at the year end by means of closing entries. Nominal accounts are income statement accounts and are also called 'temporary accounts' in contrast to balance sheet (asset, liability, and owners' equity) accounts which are called 'permanent accounts' or 'real accounts.'
Revenue or expense account that is a subdivision of the owners' equity account, and which is closed to a zero balance at the end of each accounting period. It starts with a zero balance at the beginning of a new accounting period, accumulates balances during the period, and returns to zero at the year end by means of closing entries. Nominal accounts are income statement accounts and are also called 'temporary accounts' in contrast to balance sheet (asset, liability, and owners' equity) accounts which are called 'permanent accounts' or 'real accounts.'
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