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Question
State whether the following statement is True or False.
Trading account is a nominal account.
Options
True
False
MCQ
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Solution
True
Explanation: All the direct expenses related to production are debited, while the incomes (i.e. sales) are credited in the Trading Account. As per the rule of nominal account, all the expenses/losses must be debited and all the incomes/gains must be credited. This rule is also followed while preparing a Trading Account. Therefore, it is regarded as a nominal account.
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