Overview:

A nominal account records income, expenses, gains, and losses over a specific period, typically within a fiscal year. These accounts are temporary and reset to zero at the end of the accounting period, transferring their balances to permanent accounts like retained earnings or capital. Nominal accounts help track the financial performance of a business by showing its revenue and expenses.

To link an account to a sub-category, first select the desired sub-category. Navigate to the related section and choose to add a new account. Assign a unique account code for identification and enter the default tax rate or use the lookup field to select it. Indicate if the account is used for sales orders, purchase orders, or expenses by checking the appropriate boxes. Optionally, you can also enter the credit and debit balances. Finally, save the changes to ensure they are applied.

Create Nominal Account

1. Select the Nominal Sub-Category you wish to link the Nominal Account to.
2. Go to the Related tab.
3. Select New in the Nominal Account Section.
4. Enter a unique Account Code, which is used to identify the Nominal Account.
5. Enter the default Tax Rate for this account or use the lookup field to find the correct one.
   • Tick the SO box if this account is used for Sales Orders.
   • Tick the PO box if this account is used for Purchase Orders.
   • Check the Expense box if this Nominal Accounts used for Expenses.
6. You can enter the Credit and Debit Balance.
7. Finally, click Save to ensure the changes are saved.

Nominal accounts are a crucial component of the Chart of Accounts (COA) in any financial system, such as Zumzum Financials. Understanding and properly managing these accounts ensures accurate tracking of a company’s financial activities, aiding in comprehensive financial reporting and sound decision-making. Learn more about the Chart of Accounts (COA) in Zumzum Financials.