LO 5.1 Which of the following accounts is considered a temporary or nominal account?Choose one answer from the options below.A. Fees Earned RevenueB. Prepaid AdvertisingC. Unearned Service RevenueD. Prepaid Insurance
Question
LO 5.1 Which of the following accounts is considered a temporary or nominal account?Choose one answer from the options below.A. Fees Earned RevenueB. Prepaid AdvertisingC. Unearned Service RevenueD. Prepaid Insurance
Solution
The correct answer is A. Fees Earned Revenue.
Here's why:
Temporary or nominal accounts are those that are closed at the end of each accounting period. These include all income statement accounts, such as revenues, expenses, gains, and losses.
Option A, Fees Earned Revenue, is a revenue account and therefore is a temporary or nominal account.
On the other hand, options B, C, and D are all examples of asset or liability accounts, which are permanent or real accounts. These accounts are not closed at the end of the accounting period.
So, the correct answer is A. Fees Earned Revenue.
Similar Questions
LO 5.1 Which of the following accounts is considered a permanent or real account?Choose one answer from the options below.A. Interest RevenueB. Prepaid InsuranceC. Insurance ExpenseD. Supplies Expense
Nominal accounts are the revenue and expense accounts related to a particular accounting period.Select one:TrueFalse
The post-closing trial balance includes which of the following accounts?*a. Permanent (real) accountsb. Temporary (nominal) accountsc. Accounts shown in the income statementd. None of the above.
Which of the following are permanent accounts? (check all that apply)1 pointRetained Earnings Unearned Revenue Revenue Cost of Goods Sold Common Stock
Nominal accounts to zero balance.Select one:a.Accrued Incomeb.Closing entriesc.Prepaid Expensesd.Prepaid Expenses
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.