Question

Trading and Profits & Loss A/c is based on _______________.

• A. Personal Accounts
• B. Real Accounts
• C. Nominal Accounts
• D. All of (A), (B), (C)

Answer 1

The correct option is C Nominal Accounts

Nominal accounts are those accounts which are prepared for temporary accounts. They are temporarily open for a span of a year and the balances are transferred to the permanent accounts. There is zero balance left in nominal account at the end of the year.