i. Outstanding expense is a nominal account. ii. A capital account is a real account.

Question

i. Outstanding expense is a nominal account. ii. A capital account is a real account.

State whether the following statements are True or False with reason:

i. Outstanding expense is a nominal account.

ii. A capital account is a real account.

iii. Every debit has equal and corresponding credit.

Monjur Alahi

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2025-01-04 04:42

1 Answers

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Salim Ahmed Kawsar · Accepted Answer · 2023-02-05T15:29:48+06:00

i. This statement is False.

Outstanding expenses are personal accounts. It is a representative personal account. Expenses are payable to some person.

ii. This statement is False.

Capital is a personal account. Amount invested in the business by the proprietor is capital. A proprietor is a natural person.

iii. This statement is True.

Under the Double Entry System, the two-fold effects of each transaction are recorded. Under this system one account is to be debited and another is to be credited with an equal amount.