Question

Trading account is a nominal account. (State True or False)

Answer 1

TRUE. IT IS NOMINAL ACCOUNT

Answer 2

Answer:

True

Explanation:

Trading Account is Nominal Account. At the end of the accounting year, a final account called (balance sheet) is prepared with the help of a trading account. The Trading Account is the first step of final account. In the accounting period with the help of trading account gross profit and gross loss can be calculated easily. A trading account contains the same two columns as Debit (Dr.) and Credit(Cr.)

In the Debit side of the trading account, all the direct expenses are debited. On the other hand in the credit side, all the direct incomes are credited in the credit side of the trading account.

In short, the trading account contains the purchase, sale, expenses, and incomes relating works of the company.