Question

What type of Ledger Accounts are not carried forward to next year?
(a) Personal Accounts
(b) Real Accounts
(c) Nominal Accounts
(d) All of the above​

Answer 1

Answer:

nominal account

Explanation:

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Answer 2

Answer:

The correct answer is nominal account.

Explanation:

Nominal account starts with zero for every accounting year. During the period, it collects all the gains and losses and returns to zero balance at the end of every accounting year by transferring or paying the amount or balances to a permanent account. It is a general ledger account with all expenses , incomes, gains and losses.

For example- Interest account, product revenue, cost of goods sold, compensation expense, utilities expenses etc.

Rule for nominal accounts:

Debit all expenses and losses

Credit all income and gains.

Personal accounts

Rule :

Debit the receiver

Credit the giver.

Examples: Accounts of customers, vendors, salary accounts of employees, drawings and capital accounts of owners etc.

Real accounts

It is an account dealing with the material assets of a business.

Examples: Asset account, liability accounts, stockholders' equity account etc.

Rule:

Debit what comes in

Credit what goes out