Question

Accounting what is difference in nominal account real account

Answer 1

The difference between a nominal account and a real account has to do with the balances in the accounts at the end of the accounting year: The balance in a nominal account is closed at the end of the accounting year. As a result a nominal account begins each accounting year with a zero balance.

Answer 2

A nominal account is an account that you close at the end of each accounting period. Nominal accounts are also called temporary accounts. Temporary or nominal accounts include revenue, expense, and gain and loss accounts.

A real account is an account that retains and rolls forward its ending balance at the end of the year. The areas in the balance sheet in which real accounts are found are assets, liabilities, and equity.