Revenue and expense accounts are referred as______________?
Correct answer: B. Nominal accounts
- A. Real account
- B. Nominal accounts
- C. Cash accounts
- D. Banks accountHire An Accountant
Explanation
Revenue and expense accounts are nominal accounts because they record income and costs for a particular accounting period and are then transferred to the income statement. Real accounts, by contrast, represent continuing assets or balances.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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