Question

Bank account is a Nominal account.

• A. True
• B. False

Answer 1

Answer: (B)

Accounts recording transactions with a person or group of persons are known as personal account. These accounts are necessary, in particular, to record credit transactions. Personal accounts are of the following types:

1. Natural persons: An account recording transactions with an individual is termed as natural persons' personal account.

2. Artificial or legal persons: An account recording financial transactions with an artificial person created by law or otherwise is termed as an artificial persons; personal account.

3. Representative personal accounts: An account indirectly representing a person or persons is known as representative personal account. When accounts are of a similar nature and their number er is large, it is better to fed up them under one head and open a representative personal account.

Bank account is an example of personal account and not nominal account. All the accounts related to an individual, a firm or a company are termed as a personal accounts. Hence, bank account is an example of a personal account.