Question

Commission received is Nominal Account.

• A. True
• B. False

Answer 1

The correct option is A True

Nominal accounts 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.

Nominal or temporary accounts 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.

Nominal accounts consist of the following types of accounts:

a. Insurance account

b. Wages account

c. Interest paid or received account

d. Commission paid or received account

e. Telephone expense account

f. Salary account.

Hence, commission received is a nominal account.