alleryStart learning →The income and expenditure account is which type of account?
AA real account, summarising cash flows
BA personal account of the members
CA nominal account, like profit and loss
DA representative personal account
Answer & Solution
Correct answer: C. A nominal account, like profit and loss
1. The income and expenditure account summarises the revenue income and revenue expenditure of the current year.
2. The textbook states that it is a nominal account in nature.
3. It is prepared just like a profit and loss account, with incomes on the credit side and expenses on the debit side.
4. The receipts and payments account is the real account of the pair, so the two must not be swapped.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 2 "Accounts of Not-for-Profit Organisation", §2.5_
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