Discount Account Is Real Or Nominal Or Personal Account

Since Discount Account is an indirect expense, so it is not a Real Account as real accounts are related to permanent accounts which are not closed to Income Statement. These accounts having balances which are transferred to balance sheet at the end of the accounting period.

Discount account is also not a personal account which is dealt with living or natural persons, artificial and representative personal account.

However, discount account is a nominal account as nominal accounts (Revenues, Expenses, Gains & Losses) or temporary accounts are closed at the end of the accounting period.

For example, trade discount and discount allowed are indirect expenses while discount received is an indirect income so these are considered as nominal accounts which are finally closed to Income Statement for the accounting period.

So, we can say that discount account is a nominal account and not real account and personal account.