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Question
Discount Account is_____.
Discount Account is_____.
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Solution
The correct option is D Nominal
Accounts relating to income, revenue, gain, expenses and losses are termed as nominal accounts. These accounts are also known as fictitious accounts as they do not represent any intangible asset. A separate account is maintained for each head or expense or loss and gain or income. Wages account, Rent account, Commission account are some examples of nominal account. The rule for nominal accounts is: Debit all expenses and losses; Credit all incomes and gains.Discount account can be the indirect income (if received) or indirect expenses (if paid) of a business and hence, they are classified as nominal accounts.
Accounts relating to income, revenue, gain, expenses and losses are termed as nominal accounts. These accounts are also known as fictitious accounts as they do not represent any intangible asset. A separate account is maintained for each head or expense or loss and gain or income. Wages account, Rent account, Commission account are some examples of nominal account. The rule for nominal accounts is: Debit all expenses and losses; Credit all incomes and gains.
Discount account can be the indirect income (if received) or indirect expenses (if paid) of a business and hence, they are classified as nominal accounts.
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