Question

In the discussion forum, you are expected to participate often and engage in deep levels of discourse. Please post your initial response by Sunday evening and continue to participate throughout the unit. You are required to post an initial response to the question/issue presented in the Forum and then respond to at least 3 of your classmates initial posts. You should also respond to anyone who has responded to you. The full "accounting cycle which culminates in closing the books and producing financial statements. Discuss the differences between Permanent "real" accounts and Temporary nominal accounts: What type of information is contained in nominal accounts, and what type of information is contained in real accounts? Which financial statement contains the information from nominal accounts and which contains the information from real accounts? • Provide an example of real accounts and an example of nominal accounts. Your Discussion should be a minimum of 250 words in length and not more than 450 words. Please include a word count. Following the APA standard, use references and in-text citations for the textbook and any other sources,

Answer 1

1. Nominal Accounts are accounts related and associated with losses, expenses, income, or gains. Examples include a purchase account, sales account, salary A/C, commission A/C, etc. The outcome of a nominal account is either profit or loss, which is then ultimately transferred to the capital account.

Real accounts contain the balances of assets, liabilities, and owners' equities at a specific point in time, such as at the close of business on the last day of the year. The balance in a real account is the net amount after subtracting decreases from increases in the account.

2 -

Nominal accounts are those reported in the income statement, which is the summary of the revenue and expenses of a business for a period of time. Balances in nominal accounts are cumulative over a period of time. Take the balance in the sales revenue account at the end of the year,

The real accounts contain information, such as the accounts for recording assets, liabilities, and owner's equity. Additionally, the financial statements that contain the information from the real accounts are the balance sheet accounts.

3

Nominal Account

These accounts types are related to income or gains and expenses or losses. For example: – Rent A/c, commission received A/c, salary A/c, wages A/c, conveyance A/c, etc.

Examples of Real Accounts

• Asset accounts (cash, accounts receivable, buildings, etc.)
• Liability accounts (notes payable, accounts payable, wages payable, etc.)
• Stockholders' equity accounts (common stock, retained earnings, etc.)