Which of the following is a nominal (temporary) account?
A) Unearned Service Revenue
B) Salaries and Wages Expense
C) Inventory
D) Retained Earnings

Question

Quizplus · Accepted Answer

Salaries and Wages Expense is a temporary account because it tracks the expenses related to employee wages for a specific accounting period. It is closed at the end of the period and its balance is transferred to the permanent account of Retained Earnings.

A, C, and D are all permanent accounts. Unearned Service Revenue is a liability account that represents income received for services that have not yet been performed and will be transferred to a revenue account when the services are provided. Inventory is an asset account that tracks the cost of goods available for sale. Retained Earnings is a permanent account that tracks the cumulative earnings or losses of a company since its inception.

Which of the Following Is a Nominal (Temporary) Account