Accounting Process

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 December 2010 Dear Sir/Madam

Thw net effect of all the Nominal Accounts in India?
(a) Profit & Loss A/c
(b) Trading A/c
(c) Capital A/c
(d) Balance Sheet

Please tell which is the answer and Explain?

Shyam Lal Naik

Shyam Lal Naik (Expert)
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18 December 2010 Answer is (a) and (b)

All nominal accounts are closed at the end of the accounting period and the balances are transfered to either of the Trading Account and Profit & Loss Account by way of closing entries.

If you want to specify only one answer, it is Profit & Loss Account, as P & L Account encompasses Trading Account also.