GENERAL KNOWLEDGE

Detailed explanation-1: -Nominal accounts are the accounts which relate to incomes and expense. The golden rule for nominal account is debit all expenses and credit all incomes.

Detailed explanation-2: -The golden rule for nominal accounts is: debit all expenses and losses and credit all income and gains.

Detailed explanation-3: -A nominal account is a normal ledger account that records all income, expenses, profits, and losses for a business. It records all transactions for a single fiscal year. The balances are reset to zero and the process can begin again. A nominal account is one that pays interest.

Detailed explanation-4: -The Golden Rule of Nominal Account says, “Debit All Expenses and Losses, Credit All Incomes and Gains”. Whereas, Golden Rule of Real Account says, “Debit What Comes In, Credit What Goes Out”. Thus, Wages A/c will be debited with Rs 1, 00, 000. Whereas, Cash A/c will be credited with the same amount.

Detailed explanation-5: -Rule 1: Debit all expenses and losses, credit all incomes and gains. This golden accounting rule is applicable to nominal accounts. It considers a company’s capital as a liability and thus has a credit balance. As a result, the capital will increase when gains and income get credited.