Question

Identify which of the following does not have an opening balance.

Options

• Balance sheet

• Income and Expenditure

• Receipts and Payment account 

• Profit and Loss account

Answer 1

Profit and Loss account

Explanation:

The Profit and Loss account has no opening balance because it is a nominal account that records income and expenditure for a single fiscal year. At the conclusion of the year, its final balance is completely closed out and transferred to the owner’s capital account as net profit or loss, ensuring that the new period begins with a zero balance.