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Discount received in advance account is a _____ account ? A) real B) personal C) nominal?
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Discount received in advance account is a _____ account ? A) real B) p...
Discount received in advance account is a ____ account ? A) real B) personal C) nominal? Explain in details.
The discount received in advance account is a personal account.
Explanation:
In accounting, there are three types of accounts, namely:
- Real Accounts: These accounts represent tangible assets such as property, plant, and equipment, and intangible assets like goodwill. Real accounts are permanent accounts, and their balances are carried forward to the next accounting period.
- Personal Accounts: These accounts represent individuals, firms, and companies with whom the business has transactions. Personal accounts are temporary accounts, and their balances are transferred to the profit and loss account at the end of the accounting period.
- Nominal Accounts: These accounts represent expenses, losses, incomes, and gains. Nominal accounts are also temporary accounts, and their balances are transferred to the profit and loss account at the end of the accounting period.
The discount received in advance account is opened when a business receives a discount from a supplier before the payment is due. This means that the supplier has given the discount in advance, and the business owes the supplier the discounted amount. The account represents a personal relationship between the business and the supplier, and hence it is classified as a personal account.
When the payment is made to the supplier, the discount received in advance account is debited, and the supplier's account is credited for the discounted amount. The net amount paid is recorded in the cash or bank account.
Therefore, the discount received in advance account is a personal account as it represents a relationship with a supplier who has given a discount in advance.
Community Answer
Discount received in advance account is a _____ account ? A) real B) p...
It's answer is :
B. representative personal account
B. representative personal account
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Discount received in advance account is a _____ account ? A) real B) personal C) nominal?
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Discount received in advance account is a _____ account ? A) real B) personal C) nominal? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Discount received in advance account is a _____ account ? A) real B) personal C) nominal? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Discount received in advance account is a _____ account ? A) real B) personal C) nominal?.
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