Accounting

We answer your accounting questions.

Over 500 questions have been answered on our accounting blog. Click here to suggest a question.



April 25, 2007

What is a nominal account in accounting?

Nominal accounts in accounting are the temporary accounts, such as the income statement accounts. In other words, nominal accounts are the accounts that report revenues, expenses, gains, and losses. (The owner’s drawing account is also a temporary account, even though it is not an income statement account.)

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. This closing process allows the nominal accounts to start the next accounting year with zero balances.

The balances from the income statement accounts will end up in the owner’s equity account, if the enterprise is a sole proprietorship. If the business is a corporation, the balances will end up in the retained earnings account.

Related Questions



Comments

34 Responses to “What is a nominal account in accounting?”

  1. musheer on January 2nd, 2008 11:34 am

    about accounting type question

  2. Rate of Depreciation-assets wise on January 3rd, 2008 5:16 am

    sir,

    please give me the details of rate of Depreciation for assets

  3. savitha on January 11th, 2008 4:18 am

    sir

    give more details about general ledger

  4. ajay sharma on February 22nd, 2008 5:58 am

    sir

    please tell me whether Outstanding expenses are nominal account or not.

  5. vani on April 24th, 2008 2:19 am

    Sir,
    what is debited and credited in nominal account

  6. gufran on May 5th, 2008 1:53 am

    Sir,

    I finish my graducation in 1995
    Actually i am B.A (History,Economics,English) student.
    Now i am studing in accounts.
    can you solved my problems.
    Please give the details of general account.
    Thankyou sir

  7. pradip001 on July 22nd, 2008 7:47 am

    is “purchase” nominal Account?

  8. preetpal on August 24th, 2008 10:46 am

    INFORMATION ABOUT NOMINAL ACCOUNT

  9. charlez on September 18th, 2008 8:10 am

    give us some information about stock taking and stock management

  10. VENKATESH on October 3rd, 2008 6:56 am

    what is the nominal Account

  11. avnish kumar on November 18th, 2008 3:44 am

    sir,
    I finished my graduation and i now i an persuing MCA from IEC cet GREATER NOIDA . I hsve some problem to identify nominal account .
    please make me uderstand about nominal account.

  12. Maimai on November 22nd, 2008 11:11 am

    sir,
    i need help in nominal account!!
    i get confused between it and real account

  13. hottie on January 26th, 2009 1:50 pm

    purchases is not a nomial account

  14. claris on February 8th, 2009 2:17 am

    sir,

    Is Withholding taxes can be charge/account to Retained earnings?

  15. altaf on February 15th, 2009 2:57 am

    how can define which entry goes to nominal account

  16. nasir on March 5th, 2009 11:41 am

    can we say nominical account can be a profit and loss account .

  17. nasir on March 5th, 2009 11:46 am

    can we say nominical account be a profit and loss account .

  18. osman on March 19th, 2009 10:09 am

    Sir,
    please help with the meaning of permanent account and temporary account.
    Also what are the differences between the above measured accounts.
    thank you
    osman…commonly known as O’mans

  19. ACoach on March 19th, 2009 10:50 am

    You should find answers to your question by using the search feature under the Q&A tab of http://www.AccountingCoach.com.
    Harold

  20. Sayali on April 6th, 2009 6:54 am

    is Purchases & sales accounts are nominal accounts as they are part of income statement & not personal accounts & assets or liability?

  21. Chellynn on April 25th, 2009 6:00 am

    Why is bank and cash figure in the balance sheet different from the profit for the year shown in the profit and loss account?

  22. Suzy on May 8th, 2009 10:43 pm

    How do you do a general ledger account analysis?

  23. Sally on June 9th, 2009 3:55 pm

    How are fixed assets treated under modified accrual basis accounting used by a governmental entity?

  24. rakhi on June 15th, 2009 5:23 am

    Why Balance Sheet have Begining and Ending Balances and Income/ Expense statement has only the Current Year Balances ?

  25. alfie on July 6th, 2009 10:22 pm

    is accumulated depreciation a nominal account??

  26. kay on August 13th, 2009 10:57 am

    sir, please what is the different between nominal and real account

  27. Brian on September 5th, 2009 4:23 pm

    “Nominal” accounts are “real” accounts

  28. Harish on September 24th, 2009 7:11 am

    Sir,
    what is the FIFO analisys?

  29. Harish on September 24th, 2009 7:12 am

    Sir
    What is the ladger & voucher?

  30. maxwell on October 3rd, 2009 11:20 pm

    please i rely need your help in all this questions.please give me a condenced answer to the question.
    i will be much grateful, if my questions are being answered.
    thanks.

  31. bst on October 16th, 2009 9:08 am

    sir
    give me a detail difference between permanent account and nominal account

  32. Jafar on October 19th, 2009 6:41 am

    Sir, If we have One Customer and Credit another Customer how will enter as GAAP. Some people are using Nominal account as opposit account of Each Customer.

  33. malatesh on October 22nd, 2009 3:53 am

    what is mean capital expenditure?

  34. Soda on November 3rd, 2009 11:54 am

    pls,can list Nominal account for me.

Leave a Reply