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Question

Debit - all expenses and losses

Credit - all gains and income is the rule for_______________.

A
Real account
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B
Personal account
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C
Nominal account
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D
None of these
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Solution

The correct option is C Nominal account
There are mainly three types of accounts: Real, Personal and Nominal accounts.

Accounts which are related to expense, losses, incomes or gains are called Nominal accounts. E.g. Purchase A/c, Salary A/c, Sales A/c, Commission Received A/c.

The golden rule for nominal accounts is:
Debit all expenses and losses;
Credit all incomes and gains.

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