Question

Accounts which record expenses, losses, incomes and gains of the business are known as ______________.

• A. Real accounts
• B. Nominal accounts
• C. Personal accounts
• D. Tangible real accounts

Answer 1

The correct option is B Nominal accounts

Nominal accounts in accounting are the temporary accounts, such as the income statement accounts. In other words, nominal accounts are the accounts that report revenues, expenses, gains, and losses.

They are closed at the end of each accounting year. This means that their account balances are transferred to a permanent account. This closing process allows the nominal accounts to start the next accounting year with zero balances.

Stationary is classified as a nominal account, as it is an expense.