The balance of all nominal accounts appearing in the trial balance are transferred to _________.

Balance sheet

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Suspense account

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Trading and Profit and Loss account

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General ledger

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Solution

The correct option is C Trading and Profit and Loss account
Nominal accounts in accounting are the temporary 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. Hence, all nominal accounts transferred to trading and profit and loss .

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Similar questions

Q. All expense and _______accounts appearing in the trial balance are transferred to the trading and profit and loss account.

Q. Select the most appropriate alternatives from those given below

A list of balances of all the accounts in ledger is called __________.
a) Balance Sheet
b) Profit & Loss A/c
c) Trading A/c
d) Trial Balance

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Q. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).

Assertion (A) - Any reserves or accumulated profits/losses appearing in the balance sheet should be transferred to the partner’s capital accounts in an old ratio.

Reason (R) - Accumulated profits/losses appear in the balance sheet after a change in profit-sharing ratio.

[0.88 marks]

Trial balance is a link between the ledger and final accounts. Explain.

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