Permanent And Temporary Accounts Are Also Called What

Permanent Accounts Are Also Referred To As Real Accounts

Permanent Accounts are also called Real Accounts as these accounts include assets, liabilities and owner’s equity accounts. Permanent accounts are recorded in Balance Sheet as these have balances to be shown on current accounting period and on the next accounting period.

Temporary Accounts Are Also Referred To As Nominal Accounts

Temporary Accounts are also known as nominal accounts as these consist of expenses, losses, revenues and gains, dividend or drawings accounts. Temporary accounts are recorded in Income Statement and closed to Income Summary Account at the end of the accounting period as these have no balances at the end of the accounting cycle.