nominal accounts

Nominal Account

A business account in which the balance is closed out after the end of the fiscal year. See also: Real account.

Temporary Account

An account whose balance is quickly reduced to zero after its creation by a company. For example, a company may create a temporary account for dividends after they are announced but before they are distributed. After distribution, the temporary account goes to zero. A temporary account is also called a nominal account.

nominal accounts

records of items of income received by a business, such as rents from properties, or of expenses incurred, such as rates paid. This LEDGER information is summarized periodically in the PROFIT-AND-LOSS ACCOUNT. Contrast with REAL ACCOUNTS.
References in periodicals archive ?
Members typically have no say at all in how their nominal accounts are invested.
Interest is credited on an employee's nominal account at a fixed rate (or may be based on an index rate or other variable rate).
However, there are two pitfalls: 1) once a period has been closed it cannot be reopened: 2) closing period 12 automatically resets all the nominal accounts to zero.