Question

Income and Expenditure Account is a ________ Account.

Options

• Capital account

• Real account

• Personal account

• Nominal account

Answer 1

Income and Expenditure Account is a Nominal Account.

Explanation:

In this account, only revenue items are recorded, while capital items are ignored. It is prepared to ascertain the results of the operating activities of the business over a period of time. All revenue items, i.e., both income and expenses, are recorded in it. Thus, it is treated as a nominal account.