Nominal or Fictitious Accounts:
Nominal or Fictitious accounts are accounts of the expenses and losses which a concern incurs, and incomes and gains which a concern earns in the course of its business. These accounts are called nominal accounts, because they do not really exist and they cannot be seen or touched. They are not represented in any type of tangible or visible things or assets. They exist only in names. Nominal accounts may be:
(a) Revenue accounts or incomes accounts, i.e., accounts of revenues, incomes, gains or profits, such as commission earned, interest received, discount received, etc.
(b) Expenses accounts, i.e., accounts of expenses or losses, such as salaries paid, rent paid, discount allowed, bad debts, etc.
Nominal or Fictitious accounts are accounts of the expenses and losses which a concern incurs, and incomes and gains which a concern earns in the course of its business. These accounts are called nominal accounts, because they do not really exist and they cannot be seen or touched. They are not represented in any type of tangible or visible things or assets. They exist only in names. Nominal accounts may be:
(a) Revenue accounts or incomes accounts, i.e., accounts of revenues, incomes, gains or profits, such as commission earned, interest received, discount received, etc.
(b) Expenses accounts, i.e., accounts of expenses or losses, such as salaries paid, rent paid, discount allowed, bad debts, etc.
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