nominal account

  

Definition

Revenue or expense account that is a subdivision of the owners' equity account, and which is closed to a zero balance at the end of each accounting period. It starts with a zero balance at the beginning of a new accounting period, accumulates balances during the period, and returns to zero at the year end by means of closing entries. Nominal accounts are income statement accounts and are also called 'temporary accounts' in contrast to balance sheet (asset, liability, and owners' equity) accounts which are called 'permanent accounts' or 'real accounts.'

Use nominal account in a sentence

  • I spent my weekend tracking down a penny discrepancy in Doc's nominal account, which had appeared after last quarter's closing.

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  • You may want to keep a nominal account that will allow you greater flexibility within your current financial state at that time.

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  • I had to check my nominal account to see how everything was going and it made me really happy to realize that.

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