Journal Entries Examples for Nominal Accounts

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Journal Entries Examples for Nominal Accounts

As we know
  Nominal Account is a Account Has All Information about Nominal Expenses 
     and Incomes.
       For examples, Salary, Wages, Electricity, profits, Gains, Rent, Interests,  etc.
In Nominal Account there is two transactions, One is Incomes and Other is Expenses.

According to the Accounting System, Expenses is always Debit & Income is Always credit.



Eg; 
1. Albert Mobile House Electricity Expenses of March $500


Journal Entry in Format of Journal

Date
Particulars
Ledger
folio
DEBIT
($)
CREDIT ($)
Mar-31
 Electricity Expenses A/c .……DR
      
     To Cash A/c (To Indicates CR)

(Being Electricity Expenses paid)

500/-


500/-

Total

500/-
500/-

NOTE:-
In the Journal Electricity Expenses Account is debited because, Formula of Nominal Account  Says, All Expenses Are Debit.
&
In the Journal Cash Account is credited because, When we paid cash, Cash goes out, so the formula of Real account Says What goes out CR. so Cash Account is Credited.




2.  Albert Mobile house  Interest on Investment $ 1000 

Date
Particulars
Ledger
folio
DEBIT
($)
CREDIT ($)

Jan-5
Cash A/c ………
     
   To Interest on Investment A/c(To Indicates CR)
(Being Furniture Sold )

1000/-


1000/-

Total

1000/-
1000/-

NOTE:-
in the Journal Cash Account is debited because, when Interest on Investment Received, Cash comes to us, so the formula of Real account Called What comes in DR. so Cash Account is Debited.
&
In the Journal Interest on Investment Account is credited because,  Formula of Nominal Account  Says, All Incomes Are Credit.



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