{"id":200941,"date":"2025-03-14T08:27:46","date_gmt":"2025-03-14T08:27:46","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=200941"},"modified":"2025-03-14T08:27:49","modified_gmt":"2025-03-14T08:27:49","slug":"which-of-the-following-is-a-nominal-temporary-account","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/14\/which-of-the-following-is-a-nominal-temporary-account\/","title":{"rendered":"Which of the following is a nominal (temporary) account"},"content":{"rendered":"\n<p>Which of the following is a nominal (temporary) account?<\/p>\n\n\n\n<p>a. Unearned Revenue<br>b. Salary Expense<br>c. Inventory<br>d. Retained Earnings<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is <strong>b. Salary Expense<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>In accounting, accounts are classified into two major types: <strong>permanent<\/strong> and <strong>temporary (nominal)<\/strong> accounts.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Permanent accounts<\/strong>: These accounts are carried over from one accounting period to the next. They include:<\/li>\n<\/ol>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets<\/strong><\/li>\n\n\n\n<li><strong>Liabilities<\/strong><\/li>\n\n\n\n<li><strong>Equity<\/strong> accounts like Retained Earnings These accounts are called <strong>permanent<\/strong> because their balances are cumulative and continue to exist throughout multiple periods.<\/li>\n<\/ul>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Temporary (Nominal) accounts<\/strong>: These accounts track transactions for a specific period and are closed at the end of each accounting cycle (typically at the end of a fiscal year). The balances in these accounts are reset to zero at the beginning of the next period. Temporary accounts include:<\/li>\n<\/ol>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Revenues<\/strong><\/li>\n\n\n\n<li><strong>Expenses<\/strong><\/li>\n\n\n\n<li><strong>Gains<\/strong><\/li>\n\n\n\n<li><strong>Losses<\/strong> At the end of an accounting period, temporary accounts are closed to <strong>Retained Earnings<\/strong> (a permanent account) in the closing process.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Analysis of the given options:<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>a. Unearned Revenue<\/strong>: This is a <strong>liability<\/strong> account, which is a <strong>permanent account<\/strong>. It represents money that has been received for goods or services not yet provided. Since it is a liability, it is not a temporary account.<\/li>\n\n\n\n<li><strong>b. Salary Expense<\/strong>: This is a <strong>temporary account<\/strong>, specifically an <strong>expense<\/strong> account. Expenses, including salary expense, are nominal accounts, which track costs over a specific period. At the end of the period, salary expense (and other expenses) is closed to Retained Earnings.<\/li>\n\n\n\n<li><strong>c. Inventory<\/strong>: Inventory is an <strong>asset account<\/strong>, which is a <strong>permanent account<\/strong>. Assets, including inventory, are not reset at the end of the period and are carried over.<\/li>\n\n\n\n<li><strong>d. Retained Earnings<\/strong>: This is a <strong>permanent equity account<\/strong> that tracks the accumulated earnings of the business. It does not close at the end of the period and carries over to the next.<\/li>\n<\/ul>\n\n\n\n<p>Thus, <strong>Salary Expense<\/strong> is the correct answer because it is a <strong>temporary account<\/strong> that is closed at the end of the period.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Which of the following is a nominal (temporary) account? a. Unearned Revenueb. Salary Expensec. Inventoryd. Retained Earnings The correct answer and explanation is : The correct answer is b. Salary Expense. Explanation: In accounting, accounts are classified into two major types: permanent and temporary (nominal) accounts. Analysis of the given options: Thus, Salary Expense is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-200941","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/200941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=200941"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/200941\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=200941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=200941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=200941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}