Question

Income and Expenditure Account belongs to ______ account.

• A. Real account
• B. Personal account
• C. Nominal accounts
• D. All of the above

Answer 1

Answer: (C)

Nominal accounts

Every business have to make its financial statement at the end of every year which includes profit & loss account and balance sheet.

All expenses and Income accounts are transferred to profit & loss account/ Income & Expenditure account to know the Profit & Loss of the business.

All expense and Income accounts are classified as nominal accounts hence Income and Expenditure account belongs to nominal account.