Discount Account Is Real Or Nominal Or Personal Account
Si nce Discount Account is an indirect expense, so it is not a Real Account as real accounts are related to permanent accounts w hi c h are not closed to Income Statement. T hese accou nts havi ng b ala nces w hich are tra nsferred to b ala nce s heet at the e nd of t he accou nting period. Discount account is also not a personal account w hich is dealt with livi ng or natural persons, artificial and representative personal account. However, discou nt account is a nominal account as nominal accounts (Revenues, Expenses, Gains & Losses) or temporary accounts are closed at t h e end of t h e accounting period. For example, trade discount and discount allowed are indirect expenses w h ile discount received is an indirect income so t h ese are considered as nominal accounts w hich are fi nally closed to I ncome Statement for t he accou nting period. So, we can say t hat discou nt account is a nominal account and not real account and personal account.