BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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machinery account
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sales account
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goodwill account
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equipment account
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Detailed explanation-1: -Answer: Sales a/c is not a real account. As it comes in trading a/c of final accounts, it is considered that sales & purchases are *Nominal A/C*.
Detailed explanation-2: -Purchases A/C and Sales A/C are real accounts because goods is a thing of value.
Detailed explanation-3: -Which of the following is not a real account? a)Cash accountb)Investment Accountc)Outstanding rent accountd)Purchases accountCorrect answer is option ‘C’. Can you explain this answer? Basically assets account falls in real account category.
Detailed explanation-4: -Nominal Accounts are accounts related to 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.
Detailed explanation-5: -Investment is an asset and it is a real account.