Question

all types of accounts are balanced at the end of the year. do you agree?

Answer 1

Hi Manav,

Not all the accounts can be balanced. This statement is true in respect of real and personal accounts, since these accounts are closed by ascertaining the balancing figures from their respective ledger accounts. The closing balances so ascertained become the opening balances for the next financial year.

The same is not the case in respect of nominal accounts. All nominal accounts are closed by transferring their balances to 'Trading and Profit & Loss Account.