Purchases Discount Is What Kind Of Account

Is Purchases Discount A Nominal Account Real Or A Personal Account?

Purchases Discount is not a Real Account as it is not related with assets and liabilities of the business. All of real accounts will go to the balance sheet as these are Permanent Accounts.

Purchases Discount is also not a personal account which is related with natural and living persons. Such as a sole owner’s account is named as “Mr. A’s Account” and it is treated as a personal account.

Is purchases discount is a nominal account? Yes, it is true as it is a contra expense account like Purchases Returns and Purchases Allowances and it is deducted from Gross Purchases in Income Statement to reduce it as the suppliers’ company gave purchase discount to company for goods purchased.

So, we can say that Purchases Discount is a nominal account but not a real and personal account in accounting.