CMA Foundation · Fundamentals of Financial and Cost Accounting · Accounting Cycle
Which of the following balances would normally be carried down (c/d) in the ledger and brought down (b/d) in the new period, instead of being transferred to the Profit and Loss Account or Trading Account at the year end?
The Furniture Account balance is carried down and brought down in the next period because furniture is an asset, which is a real account. Nominal accounts such as salaries, sales and carriage inwards are closed by transfer to the Trading or Profit and Loss Account.
- ASalaries Account
- BSales Account
- CFurniture AccountCorrect
- DCarriage Inwards Account
Explanation
Furniture is an asset, a real account, so its balance is carried forward to the next period. Salaries, Sales and Carriage Inwards are nominal accounts, closed by transfer to Trading or Profit and Loss Account at the year end.
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