{"id":15300,"date":"2025-01-22T02:31:39","date_gmt":"2025-01-22T02:31:39","guid":{"rendered":"https:\/\/www.hashmicro.com\/ph\/blog\/?p=15300"},"modified":"2026-04-20T09:59:13","modified_gmt":"2026-04-20T09:59:13","slug":"real-and-nominal-accounts","status":"publish","type":"post","link":"https:\/\/www.hashmicro.com\/ph\/blog\/real-and-nominal-accounts\/","title":{"rendered":"Real vs Nominal Accounts: Key Differences &#038; Examples (2026)"},"content":{"rendered":"<p>A nominal account tracks income and expenses for a single fiscal period, then resets to zero. A real account, covering assets, liabilities, and equity, carries its balance forward indefinitely. Getting these two mixed up leads to misclassified entries, wrong tax filings, and messy financial statements. For Philippine businesses <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/bir-form-2307\/\">filing with the BIR<\/a>, that kind of error gets expensive fast.<\/p>\n<p>Here&#8217;s a breakdown of the key differences between these two account types, how they show up in your financial statements, and when each one matters.<\/p>\n<p><span style=\"font-weight: 400;\"><div id=\"toc_group_article\" style=''>\r\n\t<p style='font-size:25px;font-weight:bold; margin-bottom:0px'>\r\n\t\tTable of Contents\r\n\t<\/p>\r\n\t<ul id=\"list_toc\" class='list_toc'><\/ul>\r\n<\/div>\r\n\r\n<div id=\"placeholder-toc\"><\/div>\r\n<div id=\"toc\">\r\n    <div class=\"header\">\r\n\t<span class=\"toc-title\" id=\"toc-title\">Content Lists<\/span>\t\r\n\t <i class=\"toc-icon\">\r\n        <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"30\" height=\"30\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"#000\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\" class=\"header-icon\">\r\n          <path d=\"m6 9 6 6 6-6\" \/>\r\n        <\/svg>\r\n      <\/i>\r\n\t<\/div>\r\n    <div class=\"list\">\r\n      <ul id=\"toc-list\"><\/ul>\r\n    <\/div>\r\n <\/div>\r\n\r\n<style>\r\n\/* Simple styling for the TOC *\/\r\n\t\r\n\t#toc ul li:last-child {\r\n    padding-bottom: 16px; \/* Adjust the value as needed *\/\r\n}\r\n\r\n.td-fix-index {\r\n\t transform: unset !important;\r\n     -webkit-transform: unset !important; \r\n}\r\n.footer-contact .td-fix-index {\r\n\t transform: translateZ(0) !important;\r\n     -webkit-transform: translateZ(0) !important; \r\n}\r\n\t.tdb_single_content .tdb-block-inner.td-fix-index{\r\n\t\tposition: static;\r\n\t}\r\n\t\r\n\r\n\t\r\n#toc {\r\n  background-color: #FFF;\r\n\tpadding: 17px 24px 20px 24px !important;\r\n  margin-bottom: 20px;\r\n\/*   border: 1px solid #9C171E; *\/\r\n  border-radius: 6px;\r\n\tdisplay: none;\r\n  max-width: 100%;\r\n  transition: .4s ease height;\r\n\tmargin-left: 0;\r\n\toverflow: hidden;\r\n}\r\n\r\n#toc .header{\r\n  display: flex;\r\n  align-items: center;\r\n  justify-content: space-between;\r\n\tbackground-color: transparent;\r\n}\r\n\t\r\n\t#toc.sticky .header{\r\n\t\tpadding: 4px 0;\r\n\t}\r\n\t\r\n.header p{\r\n  font-size: 18px !important;\r\n  font-weight: 600 !important;\r\n  color: #393939;\r\n   margin-bottom: 0;\r\n  \/* margin-top: 20px; *\/\r\n}\r\n\r\n.toc-icon{\r\n  float: right;\r\n\/*   visibility: hidden; *\/\r\n}\r\n\r\n\t.toc-title{\r\n\t\tmargin-right: auto;\r\n\/* \t\tpadding-left: 20px; *\/\r\n\t\tfont-weight: 600;\r\n\t\talign-self: center;\t}\t\r\n\r\n#toc ul {\r\n  list-style-type: none;\r\n  padding-left: 0;\r\n  padding-top: 20px;\r\n  margin-top: 0px;\r\n}\r\n\t\r\n#toc.sticky ul{\r\n\toverflow-y: auto;\r\n\tmax-height: 250px;\r\n\tmargin-top: 0px;\r\n\tpadding-top: 20px;\r\n\/* \tborder-top: 1px solid #d3d3d3; *\/\r\n}\r\n\t\r\n#toc ul li {\r\n\/*   margin-bottom: 10px; *\/\r\n  margin-bottom: 10px;\r\n\tmargin-left: 0;\r\n\ttransition: .2s ease;\r\n\tcursor: pointer;\r\n}\r\n\t\r\n\t#toc.sticky ul li {\r\n\t  margin-right: 10px;\r\n\t}\r\n\t\r\n.td-post-content #toc-list li a:hover, .td-post-content #toc-list a.active{\r\n\tbackground-color: #FFF;\r\n\/* \tpadding: 8px 16px 8px 16px; *\/\r\n\tpadding: 4px 16px 4px 16px;\r\n\tborder-radius: 6px;\r\n\tcolor: #9c171e !important;\r\n\tfont-weight: 600 !important;\r\n}\r\n\t\r\n\t.td-post-content #toc-list li:hover a, .td-post-content #toc-list a.active{\r\n\t\tcolor: #9C171E !important;\r\n\t\tfont-weight: 600 !important;\r\n\t}\r\n\t\r\n.td-post-content #toc-list a.active{\r\n\tfont-weight: bold !important;\r\n\tcolor: #9C171E !important;\r\n}\r\n\t\r\n#toc a, .td-post-content #toc-list a {\r\n  text-decoration: none;\r\n  color: #ea1717 !important;\r\n  transition: .2s ease;\r\n\tfont-weight: 400 !important;\r\n\tdisplay: block;\r\n\t\r\n\tpadding: 4px 16px 4px 0;\r\n}\r\n\r\n#toc.sticky {\r\n  position: fixed;\r\n\/*   top: 73px; *\/\r\n\tbottom: 0;\r\n  z-index: 100; \r\n  box-shadow: 0 2px 5px rgba(0,0,0,0.1); \r\n\twidth: 100%; \r\n\tbackground-color: #FFF;\r\n\/* \tbackground-color: #FFF1F1; *\/\r\n\tborder-bottom: 1px solid #ea1717;\r\n\/*   border: 1px solid #393939; *\/\r\n  box-shadow: 0px 0px 14px 0px #00000040;\r\n  cursor: pointer;\r\n\tanimation: fadein .3s ease;\r\n\tpadding: 12px 16px !important;\r\n}\r\n\t\r\n\t.fadein{\r\n\t\tanimation: fadein .3s ease;\r\n\t}\r\n\t\r\n\t.fadeout{\r\n\t\tanimation: fadeout .3s ease;\r\n\t}\r\n\t\r\n\t\r\n\t@keyframes fadein{\r\n\t\t0% {\r\n\t\t\topacity: 0;\r\n\t\t}\r\n\t\t100%{\r\n\t\t\topacity: 1;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@keyframes fadeout{\r\n\t\t0% {\r\n\t\t\topacity: 1;\r\n\t\t}\r\n\t\t100%{\r\n\t\t\topacity: 0;\r\n\t\t}\r\n\t}\r\n\r\n\t\r\n#toc.sticky .header p{\r\n\tmargin-bottom: 10px;\r\n\tmargin-top: 10px;\r\n}\r\n\r\n#toc.sticky .toc-icon{\r\n  visibility: visible;\r\n\/* \ttransition: 0.4s ease; *\/\r\n}\r\n\t\r\n\t.toc-icon{\r\n\t\talign-items: center;\r\n    \tdisplay: flex;\r\n\t}\r\n\t\r\n\tsvg.header-icon{\r\n\/* \t\tbackground-color: #9c171e; *\/\r\n\t\tbackground-color: #FFF;\r\n\t\tborder-radius: 30px;\r\n\t\tpadding: 5px;\r\n\t}\r\n\r\n#toc.sticky .list{\r\n\/*   max-height: 0; *\/\r\n  transition: height 0.4s ease;\r\n}\r\n\t\r\n\t#toc .list{\r\n\/*   max-height: 0; *\/\r\n  transition: height 0.4s ease;\r\n}\r\n\r\n#toc .header.active .toc-icon{\r\n\ttransform: rotate(0deg); \r\n\topacity: 1;\r\n}\r\n\r\n\t#toc .header.active + .list {\r\n\t  max-height: 200px; \/* Adjust this value as needed *\/\r\n\t  opacity: 1;\r\n\t}\r\n\t\r\n\t#placeholder-toc{\r\n\/* \t\tdisplay: none; *\/\r\n\t}\r\n\t\r\n\t@media (min-width: 768px) and (max-width: 991px){\r\n\t\t#toc.sticky{\r\n\/* \t\t\ttop: 104px; *\/\r\n\t\t\tbottom: 0px;\r\n\t\t}\r\n\t\t\r\n\t\t#toc{\r\n\t\t\twidth: unset !important;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@media (max-width: 767px){\r\n\t\t#toc{\r\n\t\t\twidth: 100% !important;\r\n\t\t\tdisplay: inline-block;\r\n\t\t}\r\n\t\t\r\n\t\t#toc.sticky{\r\n\t\t\twidth: 84% !important;\r\n\/* \t\t\ttop: 81px; *\/\r\n\t\t\tbottom: 60px;\r\n\t\t\tmargin-left: auto;\r\n\t\t\tmargin-right: auto;\r\n\t\t\tpadding: 0 16px;\r\n\/* \t\t\tright: 5%; *\/\r\n\t\t}\r\n\t}\r\n<\/style>\r\n\r\n<style>\r\n\t#list_toc li {margin-bottom: 0;margin-top: 5px;}\r\n\t#list_toc > li > ul {padding-left: 20px;margin-bottom: 0;}\r\n\t#list_toc{height:max-content;transition:ease-in-out}\r\n\t#list_toc li {margin-bottom: 0;margin-top: 5px;}\r\n\t#list_toc_float li.active > a {color:#b1252d;background: #ffe1e3;}\r\n\t#list_toc_float li a {padding:3px 7px}\r\n\t#list_toc_float li a {\r\n\t\tdisplay: block;\r\n\t\tcolor:#000;\r\n\t\tmargin-bottom: 10px;\r\n\t\ttransition:all 0.2s ease-in-out;\r\n\t\tfont-size:15px\r\n\t}\r\n\t#list_toc_float li{list-style:none;list-style-position:inside; margin-left:0;}\r\n\t#list_toc_float a:hover{color:#b1252d;}\r\n\t\r\n\t#list_toc_float li a{margin-bottom:0px}\r\n\t#toc_group_float{\r\n\t\tline-height: 24px;\r\n\t\tmax-height: calc(100vh - 100px);\r\n\t\toverflow: auto;\r\n\t\tz-index: 99;\r\n\t\tdisplay:none!important;\r\n\t\tbackground:#fff;\r\n\t\ttransition:all 0.5s linear\r\n\t}\r\n\t\r\n\t@media (min-width:1019px){\r\n\t\t#toc_group_float {\r\n\t\t\tdisplay:block!important;\r\n\t\t\t}\r\n\t\t\t\t#toc_group_article {\r\n\t\t\tdisplay:none;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@media (max-width:768px){\r\n\t\t#toc_group_article {\r\n\t\t\tdisplay:none;\r\n\t\t}\r\n\t}\r\n\t\r\n\t \/* custom scrollbar style *\/\r\n::-webkit-scrollbar {\r\n    width: 7px;\r\n}\r\n::-webkit-scrollbar-track {\r\n    background: #d7a2a4;\r\n}\r\n::-webkit-scrollbar-thumb {\r\n    background: #b1252d;\r\n    border-radius: 15px;\r\n}\t\t\r\n\r\n<\/style>\r\n\r\n<script>\r\n\tdocument.addEventListener('DOMContentLoaded', function() {\r\n\t\t\/\/ Function to handle click on all <a> elements with href starting with #\r\n\t\tfunction handleTitleClick(event) {\r\n\t\t\tevent.preventDefault();\r\n\t\t\tconst targetId = this.getAttribute('href').substring(1);\r\n\t\t\tconst targetElement = document.getElementById(targetId);\r\n\r\n\t\t\tif (targetElement) {\r\n\t\t\t\tconst headerHeight = document.querySelector('#toc .header').offsetHeight;\r\n\t\t\t\tconst navbarHeight = document.getElementById('tdi_34') ? document.getElementById('tdi_34').offsetHeight : 0;\r\n\t\t\t\tconst windowHeight = window.innerHeight;\r\n\t\t\t\tconst targetOffset = targetElement.offsetTop;\r\n\t\t\t\tconst scrollTo = targetOffset + (windowHeight \/ 2) + (headerHeight) - navbarHeight - 40;\r\n\r\n\t\t\t\twindow.scrollTo({\r\n\t\t\t\t\ttop: scrollTo,\r\n\t\t\t\t\tbehavior: 'smooth'\r\n\t\t\t\t});\r\n\t\t\t}\r\n\t\t}\r\n\r\n\t\t\/\/ Add event listener for all <a> elements in toc-list and list-toc\r\n\t\tconst titleLinks = document.querySelectorAll('#toc-list a, #list_toc a');\r\n\t\ttitleLinks.forEach(link => {\r\n\t\t\tlink.addEventListener('click', handleTitleClick);\r\n\t\t});\r\n\t});\r\n<\/script>\r\n\r\n<!-- ToC List for mobile -->\r\n<script>\r\n \/\/ Generate TOC based on headings\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  \/\/ Get the element that will contain the TOC\r\n  const tocList = document.getElementById('toc-list');\r\n\r\n  \/\/ Get the element with class 'td-post-content'\r\n  const article = document.querySelector('.td-post-content');\r\n\r\n  \/\/ Find all h2 elements within the article\r\n  const headers = article.getElementsByTagName('h2');\r\n\r\n  \/\/ Loop through the h2 elements and create a list item for each one\r\n  for (let i = 0; i < headers.length; i++) {\r\n    const header = headers[i];\r\n    const headerText = header.textContent;\r\n\/\/     const headerId = 'header-' + i;\r\n    const headerId = headerText\r\n    .toLowerCase()\r\n    .trim()\r\n    .replace(\/[^\\w\\s-]\/g, '')  \/\/ hapus tanda baca\r\n    .replace(\/\\s+\/g, '-'); \/\/ ganti spasi jadi \"-\"\r\n\r\n    \/\/ Set an ID for the header if it doesn't have one\r\n    header.setAttribute('id', headerId);\r\n\r\n    \/\/ Create a list item for the TOC\r\n    const listItem = document.createElement('li');\r\n\r\n    \/\/ Create a link for the list item\r\n    const link = document.createElement('a');\r\n    link.setAttribute('href', '#' + headerId);\r\n    link.textContent = headerText;\r\n\r\n    \/\/ Append the link to the list item\r\n    listItem.appendChild(link);\r\n\r\n    \/\/ Append the list item to the TOC list\r\n    tocList.appendChild(listItem);\r\n  }\r\n});\r\n\r\n\/\/ Keep height and placement of content using placeholder in place of TOC\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  const toc = document.querySelector('#toc');\r\n  const placeholderToc = document.querySelector('#placeholder-toc');\r\n\r\n  function setPlaceholderHeight() {\r\n    placeholderToc.style.height = `${toc.offsetHeight}px`;\r\n  }\r\n\r\n  \/\/ Set the initial height of the placeholder\r\n  setPlaceholderHeight();\r\n\r\n  \/\/ Update the height on window resize\r\n  window.addEventListener('resize', setPlaceholderHeight);\r\n});\r\n  const tocTitle = document.querySelector('#toc-title');\r\n\r\n\/\/ Sticky TOC and update heading\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  const toc = document.querySelector('#toc');\r\n  const footer = document.querySelector('.td-footer-template-wrap');\r\n  const tocParent = toc.parentElement;\r\n  const divTop = tocParent.getBoundingClientRect().top + window.pageYOffset;\r\n  const tocHeight = toc.offsetHeight;\r\n  const triggerPoint = divTop + tocHeight + 700;\r\n  const footerHeight = footer.offsetHeight;\r\n  const triggerFooterPoint = footer.getBoundingClientRect().top + window.pageYOffset - footerHeight - footerHeight - footerHeight;\r\n  const phtoc = document.querySelector('#placeholder-toc');\r\n  const headers = document.querySelectorAll('.td-post-content h2');\r\n  const navLinks = document.querySelectorAll('#toc-list a');\r\n\t\r\n\tconst panel2 = document.querySelector(\"#toc .list\");\r\n\tvar icon = document.querySelector(\".toc-icon\");\r\n\r\n  let activeLink = null; \/\/ Declare activeLink outside the loop\r\n\t\r\n  \/\/ Function to handle scroll and add\/remove .sticky class\r\n  function handleScroll() {\r\n    const windowTop = window.pageYOffset || document.documentElement.scrollTop;\r\n    let currentHeader = '';\r\n\r\n    \/\/ Highlight user progress as the heading comes\r\n    headers.forEach(header => {\r\n\t\tconst headerTop = header.offsetTop;\r\n\t\tconst headerHeight = header.clientHeight;\r\n\t\tif(window.innerWidth < 767){\r\n\t\t\ttocTitle.textContent = 'Table of Contents'; \/\/ Selalu pertahankan judul ini di mobile\r\n\t\t} else {\r\n\t\t\tif (window.scrollY >= (headerTop - headerHeight + 700)) {\r\n\t\t\t\tconst currentHeaderId = header.getAttribute('id');\r\n\t\t\t\tconst currentHeaderText = document.getElementById(currentHeaderId).textContent;\r\n\t\t\t\ttocTitle.textContent = currentHeaderText;\r\n\t\t\t\tcurrentHeader = currentHeaderId;\r\n\t\t\t}\r\n\t\t}\r\n\t});\r\n\r\n    navLinks.forEach(link => {\r\n      link.classList.remove('active');\r\n      if(currentHeader != '') {\r\n\t\t  if (link.getAttribute('href').includes(currentHeader)) {\r\n\t\t\t  link.classList.add('active');\r\n\t\t  }\r\n\t  }\r\n    });\r\n\r\n    \/\/ Update TOC title if sticky\r\n    if (windowTop > triggerPoint) {\r\n      if (!toc.classList.contains('sticky')) {\r\n        phtoc.style.display = \"block\";\r\n        toc.classList.add('sticky');\r\n        toc.style.width = `${tocParent.offsetWidth}px`; \/\/ Set width to match the parent element\r\n        toc.setAttribute('style', 'width: ' + tocParent.offsetWidth + 'px !important;');\r\n        toc.style.backgroundColor = \"#FFF\";\r\n\t\tpanel2.style.height = '0px';\r\n\t\t  icon.style.transform = \"rotate(180deg)\";\r\n\t\t  if(window.innerWidth < 767){\r\n\t\t\t  tocTitle.textContent = 'Table of Contents'; \/\/ Reset title\r\n       \t\t  toc.style.width = '150px'; \/\/ Set width to match the parent element\r\n\t\t  }\r\n      }\r\n      if (currentHeader) {\r\n        tocTitle.textContent = activeLink ? activeLink.textContent : \"\"; \/\/ Update title only if activeLink exists\r\n      }\r\n    } else {\r\n      toc.classList.remove('sticky');\r\n      phtoc.style.display = \"none\";\r\n      toc.style.width = 'unset'; \/\/ Reset to original width\r\n      toc.style.backgroundColor = \"#FFF\";\r\n      tocTitle.textContent = 'Table of Contents'; \/\/ Reset title\r\n\t\tpanel2.style.height = panel2.scrollHeight + \"px\";\r\n\t\ticon.style.transform = \"rotate(180deg)\";\r\n    }\r\n  }\r\n\r\n    \/\/ Attach the scroll event listener to the window\r\n    window.addEventListener('scroll', handleScroll);\r\n\r\n    \/\/ Initial call to handleScroll to set the correct state on load\r\n    handleScroll();\r\n});\r\n\t\r\n\t\/\/ Open toggle TOC\r\n\t  document.addEventListener(\"DOMContentLoaded\", function() {\r\n\t\tvar tocHeader = document.querySelector(\"#toc .header\");\r\n\t\tvar toc = document.querySelector(\"#toc\");\r\n\t\tvar icon = document.querySelector(\".toc-icon\");\r\n\t\tconst tocTitle = document.querySelector('#toc-title');\r\n\t\tconst tocs = document.querySelector('#toc.sticky');\r\n \t\tconst tocParent = toc.parentElement;\t\t  \r\n\r\n\t\t  tocHeader.addEventListener(\"click\", function() {\r\n\t\t\tvar panel = this.nextElementSibling;\r\n\t\t\tif (panel.style.height !== '0px') { \/\/ Check if height is not 0px\r\n\t\t\t  panel.style.height = '0px'; \/\/ Set height to 0 for full collapse\r\n\t\t\t  icon.style.transform = \"rotate(180deg)\";\r\n\t\t\t\tif(window.innerWidth > 768){\r\n\t\t\t\t\tif(!toc.classList.contains('sticky')){\r\n\t\t\t\t\t\ttoc.style.width = \"unset\";\r\n\t\t\t\t\t}\r\n\t\t\t\t\tif (toc.classList.contains('sticky')){\r\n\t\t\t\t\t\ttoc.style.width = '${tocParent.offsetWidth}px';\r\n\t\t\t\t\t\ttoc.setAttribute('style', 'width: ' + tocParent.offsetWidth + 'px !important;');\r\n\t\t\t\t\t}\r\n\t\t\t\t}\r\n\t\t\t\tif(window.innerWidth < 767){\r\n\t\t\t\t\ttoc.style.width = \"unset\"; \/\/ Reset width\r\n\t\t\t\t}\r\n\t\t\t\ttoc.style.backgroundColor = \"#FFF1F1\";\r\n\t\t\t} else {\r\n\t\t\t  panel.style.height = panel.scrollHeight + \"px\";\r\n\t\t\t  icon.style.transform = \"rotate(0deg)\";\r\n\t\t\t  toc.style.backgroundColor = \"#FFF\";\r\n\t\t\t  tocTitle.textContent = 'Table of Contents'; \/\/ Reset title\r\n\t\t\t\ttoc.style.paddingBottom = '24px';\r\n\t\t\t \tif(window.innerWidth < 767){\r\n\t\t\t\t\ttoc.style.width = `${tocParent.offsetWidth}px`; \/\/ Set width to match the parent element\r\n\t\t\t\t\ttoc.setAttribute('style', 'width: ' + tocParent.offsetWidth + 'px !important;');\r\n\t\t\t\t}\r\n\t\t\t}\r\n\t\t  });\r\n\r\n\t\t  \/\/ Close TOC when a link inside it is clicked\r\n\t\t  var tocLinks = document.querySelectorAll(\"#toc .list a\");\r\n\t\t  tocLinks.forEach(function(link) {\r\n\t\t\tlink.addEventListener(\"click\", function() {\r\n\t\t\t  var panel = document.querySelector(\"#toc .list\");\r\n\t\t\t  panel.style.height = '0px'; \/\/ Set height to 0 for full collapse\r\n\t\t\t  icon.style.transform = \"rotate(180deg)\";\r\n\t\t\t  toc.style.backgroundColor = \"#FFF\";\r\n\t\t\t});\r\n\t\t  });\r\n\t\t});\r\n\t\r\n\/\/ \tmake the heading at the center of the viewport\r\n\/\/ \tdocument.addEventListener('DOMContentLoaded', function() {\r\n\/\/     \/\/ Add click event listener to all links in the TOC list\r\n\/\/     document.querySelectorAll('#toc-list a').forEach(anchor => {\r\n\/\/         anchor.addEventListener('click', function (e) {\r\n\/\/             e.preventDefault(); 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background-color: #fffacd; border-radius: 25px 25px 25px 25px;\" width=\"100%\">\n<tbody>\n<tr>\n<td style=\"padding: 15px; border: none;\">\n<h3 style=\"margin-bottom: 10px;\"><span style=\"background-color: #990000; color: #ffffff; padding: 5px;\"><b>Key Takeaways<\/b><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><a href=\"#a\">Nominal accounts are temporary<\/a> and reset each fiscal year, recording income and expenses for a specific period.<\/li>\n<li style=\"font-weight: 400;\"><a href=\"#b\">Real accounts are permanent<\/a>, carrying balances forward and reflecting assets, liabilities, and equity over time.<\/li>\n<li style=\"font-weight: 400;\"><a href=\"#c\">Understanding the difference<\/a> helps businesses track financial performance, manage assets, and prepare accurate reports.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><b><span id=\"a\">What is a Nominal Account?<\/span><\/b><\/h2>\n<p>A nominal account, sometimes called a temporary account, records transactions for one fiscal year. At year-end, its balance resets to zero, so you start the next period fresh. Nominal accounts primarily include income statement accounts such as revenues and expenses. Additionally, the income summary and dividends accounts, if utilized during the <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/month-end-closing\/\">closing process, also count as temporary accounts<\/a>.<\/p>\n<h2><b><span id=\"b\">What is a Real Account?<\/span><\/b><\/h2>\n<p><span id=\"real&quot;\">Real accounts, also known as permanent accounts, remain part of a company\u2019s books indefinitely. Their balances carry forward at the end of each accounting period. Examples of real accounts are balance sheet accounts like assets, liabilities, and stockholders&#8217; equity.<\/span><\/p>\n<p>To move a balance from a nominal account to a real one, you make a <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/accounting-system\/\">closing journal entry<\/a>. For an expense account (which carries a debit balance), you credit the expense account and debit the permanent <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/accounts-receivable-software\/\">account that receives the funds<\/a>. Conversely, for a revenue account with a credit balance, you debit the revenue account and crediting the corresponding permanent account.<\/p>\n<p><strong>Example:<\/strong><br \/>\nExpense <strong>\u20b1<\/strong>10,000 \u2192 Dr. Income Summary <strong>\u20b1<\/strong>10,000 | Cr. Salaries Expense <strong>\u20b1<\/strong>10,000<br \/>\nThen closed to Retained Earnings:<br \/>\nDr. Retained Earnings <strong>\u20b1<\/strong>10,000 | Cr. Income Summary <strong>\u20b1<\/strong>10,000<\/p>\n<h2><b><span id=\"c\">Difference between Nominal Accounts and Real Accounts<\/span><\/b><\/h2>\n<p>\u201cNominal Accounts\u201d and \u201cReal Accounts\u201d are terms used in accounting to classify different types of accounts in a business\u2019s records. They come from the double-entry bookkeeping system and organize transactions into two main groups:<\/p>\n<table style=\"width: 100%; border-collapse: collapse;\">\n<tbody>\n<tr>\n<td style=\"width: 25%; background-color: #990000; color: #ffffff; padding: 6px; text-align: center;\"><b>Aspect<\/b><\/td>\n<td style=\"width: 37.5%; background-color: #990000; color: #ffffff; padding: 6px; text-align: center;\"><b>Nominal Accounts<\/b><\/td>\n<td style=\"width: 37.5%; background-color: #990000; color: #ffffff; padding: 6px; text-align: center;\"><b>Real Accounts<\/b><\/td>\n<\/tr>\n<tr>\n<td style=\"padding: 6px;\">Definition<\/td>\n<td style=\"padding: 6px;\">Temporary accounts that record income, expenses, gains, and losses for a specific period.<\/td>\n<td style=\"padding: 6px;\">Permanent accounts that represent assets, liabilities, and equity on an ongoing basis.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding: 6px;\">Account Types<\/td>\n<td style=\"padding: 6px;\">Includes revenue, expense, gain, loss, and drawing accounts.<\/td>\n<td style=\"padding: 6px;\">Includes cash, accounts receivable, inventory, accounts payable, and capital\/equity.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding: 6px;\">Balance Treatment<\/td>\n<td style=\"padding: 6px;\">Closed and reset to zero at the end of each accounting period.<\/td>\n<td style=\"padding: 6px;\">Balances carry forward to the next period and accumulate over time.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding: 6px;\">Financial Statement Link<\/td>\n<td style=\"padding: 6px;\">Mainly appear on the income statement and affect profit or loss.<\/td>\n<td style=\"padding: 6px;\">Appear on the balance sheet and show the financial position of the business.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding: 6px;\">Main Focus<\/td>\n<td style=\"padding: 6px;\">Track performance (income and expenses) for a set time period.<\/td>\n<td style=\"padding: 6px;\">Show ongoing value of assets, debts, and owners\u2019 equity.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong>Simple example:<\/strong><br \/>\nA retail store in Quezon City, in January:<\/p>\n<ul>\n<li>Sales Revenue <strong>\u20b1<\/strong>150,000 = nominal account because it records income for the current period and will be reset at year-end.<\/li>\n<li>Cash <strong>\u20b1<\/strong>150,000 = real account because it remains on the balance sheet and carries forward to the next period.<\/li>\n<\/ul>\n<p>In traditional double-entry bookkeeping, accountants also recognize <strong>personal accounts<\/strong>, which relate to individuals, businesses, or organizations such as customers, suppliers, and owners. Personal accounts track who the business gives value to or receives value from. For example, <em>Accounts Receivable &#8211; Juan Store<\/em> or <em>Accounts Payable &#8211; ABC Supplier<\/em> identifies a specific party, while <em>Cash<\/em> or <em>Inventory<\/em> represents the asset itself.<\/p>\n<p>This classification is especially relevant for businesses using <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/bir-computerized-accounting-system\/\">BIR-registered computerized systems<\/a>, where account types must be properly mapped.<\/p>\n<h2><b>Functions of Nominal Accounts and Real Accounts<\/b><b><\/b><\/h2>\n<article class=\"text-token-text-primary w-full focus:outline-none [--shadow-height:45px] has-data-writing-block:pointer-events-none has-data-writing-block:-mt-(--shadow-height) has-data-writing-block:pt-(--shadow-height) [&amp;:has([data-writing-block])&gt;*]:pointer-events-auto scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]\" dir=\"auto\" tabindex=\"-1\" data-turn-id=\"request-692cf69d-f800-8323-b948-8ed378deff68-36\" data-testid=\"conversation-turn-78\" data-scroll-anchor=\"true\" data-turn=\"assistant\">\n<div class=\"text-base my-auto mx-auto pb-10 [--thread-content-margin:--spacing(4)] thread-sm:[--thread-content-margin:--spacing(6)] thread-lg:[--thread-content-margin:--spacing(16)] px-(--thread-content-margin)\">\n<div class=\"[--thread-content-max-width:40rem] thread-lg:[--thread-content-max-width:48rem] mx-auto max-w-(--thread-content-max-width) flex-1 group\/turn-messages focus-visible:outline-hidden relative flex w-full min-w-0 flex-col agent-turn\" tabindex=\"-1\">\n<div class=\"flex max-w-full flex-col grow\">\n<div class=\"min-h-8 text-message relative flex w-full flex-col items-end gap-2 text-start break-words whitespace-normal [.text-message+&amp;]:mt-1\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"3631e8ea-94a7-4ab8-8ef2-2db128c2850c\" data-message-model-slug=\"gpt-5-1\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-[1px]\">\n<div class=\"markdown prose dark:prose-invert w-full break-words light markdown-new-styling\">\n<p data-start=\"54\" data-end=\"366\" data-is-last-node=\"\" data-is-only-node=\"\">The table below breaks down their key functions and roles to help you see how each contributes to accurate and reliable accounting records.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<table style=\"width: 100%; border-collapse: collapse;\">\n<tbody>\n<tr>\n<td style=\"width: 25%; background-color: #990000; color: #ffffff; padding: 6px; text-align: center;\"><b>Aspect<\/b><\/td>\n<td style=\"width: 37.5%; background-color: #990000; color: #ffffff; padding: 6px; text-align: center;\"><b>Temporary Accounts (Nominal)<\/b><\/td>\n<td style=\"width: 37.5%; background-color: #990000; color: #ffffff; padding: 6px; text-align: center;\"><b>Permanent Accounts (Real)<\/b><\/td>\n<\/tr>\n<tr>\n<td style=\"padding: 6px;\">Main Functions<\/td>\n<td style=\"padding: 6px;\">\n<ul style=\"margin: 0; padding-left: 18px;\">\n<li>Facilitate accurate categorization of transactions for reliable reports.<\/li>\n<li>Support the matching concept (revenue, COGS, expenses).<\/li>\n<li>Simplify preparation of retained earnings or loss reports.<\/li>\n<li>Enable faster reporting through accounting system automation.<\/li>\n<li>Optimize cash flow reporting with CRM-Sales integration.<\/li>\n<\/ul>\n<\/td>\n<td style=\"padding: 6px;\">\n<ul style=\"margin: 0; padding-left: 18px;\">\n<li>Reflect continuous financial condition across accounting periods.<\/li>\n<li>Act as audit checkpoints for compliance and verification.<\/li>\n<li>Provide insights into growth potential and net worth for stakeholders.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"padding: 6px;\">Key Notes<\/td>\n<td style=\"padding: 6px;\">Temporary accounts offer detailed tracking of income and expenses but require high accuracy when done manually. Accounting software helps streamline and speed up reporting.<\/td>\n<td style=\"padding: 6px;\">Permanent accounts provide long-term visibility of assets, liabilities, and equity, supporting strategic financial decisions.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span id=\"function\"><br \/>\nTemporary accounts provide a detailed view of income and expenses, but manual methods require extra accuracy to avoid errors. Accounting software can greatly streamline the process, ensuring faster and more accurate financial reporting.<\/span><\/p>\n<p>Permanent accounts directly affect in showing the company\u2019s financial health and supporting informed decision-making, such as investment or loan approvals. Understanding the cut-off date is also needed for distinguishing between nominal and real accounts.<\/p>\n<h2><b>Examples of Nominal Accounts<\/b><\/h2>\n<h2><a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples.webp\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-15301\" src=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples.webp\" alt=\"real account examples\" width=\"1200\" height=\"675\" srcset=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples.webp 1200w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples-300x169.webp 300w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples-1024x576.webp 1024w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples-768x432.webp 768w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples-747x420.webp 747w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples-150x84.webp 150w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples-696x392.webp 696w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/01\/real-account-examples-1068x601.webp 1068w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/a><\/h2>\n<p>Nominal accounts or temporary accounts purpose is to track income, costs, and other period-based transactions within one accounting period. The company closes these balances and resets them to zero for the next cycle at every end of period.<\/p>\n<p>Common examples include Sales Revenue, Cost of Goods Sold, rent expense, salaries expense, interest income, and interest expense. For instance, if a retail shop in Manila records <strong>\u20b1<\/strong>180,000 in sales and <strong>\u20b1<\/strong>95,000 in cost of goods sold in April, both accounts are nominal because they only measure that month\u2019s performance.<\/p>\n<p>Most nominal accounts fall under <b>revenue<\/b> and <b>expenses<\/b>. However, temporary accounts can also include items such as <em>dividends<\/em> or <em>owner withdrawals<\/em>, because the business also clears them at period-end rather than carrying them forward like balance sheet accounts.<\/p>\n<h3><b>1. Expenses<\/b><\/h3>\n<p>Expenses are the costs a business incurs to operate and earn revenue. These accounts appear in the income statement for the current period only.<\/p>\n<ul>\n<li><b>Operational expenses:<\/b> These are routine costs directly connected to running the business, such as rent, salaries, supplies, insurance, and advertising. For example, if a Quezon City trading business pays <strong>\u20b1<\/strong>25,000 in rent, <strong>\u20b1<\/strong>40,000 in salaries, and <strong>\u20b1<\/strong>8,000 in advertising for the month, each amount is recorded in a separate nominal expense account. Some of these may also qualify as deductible items when you file with the BIR. Which business expenses qualify as <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/tax-deduction\/\">tax deductions in the Philippines<\/a><\/li>\n<li><b>Non-operational expenses:<\/b> These are costs that do not come from the company\u2019s main operations, such as interest expense or bad debt losses. For example, if the same business pays <strong>\u20b1<\/strong>3,500 in loan interest and writes off <strong>\u20b1<\/strong>6,000 from an uncollectible customer balance, both are recorded as non-operational expenses.<\/li>\n<\/ul>\n<h3><b>2. Revenue<\/b><\/h3>\n<p>Revenue is the income a business earns during a specific accounting period. Like expenses, revenue accounts are temporary and are closed at period-end.<\/p>\n<ul>\n<li><b>Operational revenue:<\/b> This is income earned from the company\u2019s main business activity. For example, if a wholesaler sells goods worth <strong>\u20b1<\/strong>220,000 in one month, that amount is recorded as sales revenue. If a logistics company earns <strong>\u20b1<\/strong>75,000 from delivery services, that is also operational revenue.<\/li>\n<li><b>Non-operational revenue:<\/b> This is income from activities outside the company\u2019s core operations and may not occur regularly. For example, a business may receive <strong>\u20b1<\/strong>2,500 in bank interest or <strong>\u20b1<\/strong>10,000 in commission income from a side arrangement. These amounts are recorded separately so the business can clearly distinguish regular operating income from incidental income.<\/li>\n<\/ul>\n<h2><b>Examples of Real Accounts<\/b><\/h2>\n<p>Real accounts are permanent accounts that stay in the books from one period to the next. They usually appear in the statement of financial position and fall into three main groups: <b>assets, liabilities, and equity.<\/b><\/p>\n<p>For example, if a small store in Makati has <strong>\u20b1<\/strong>120,000 in cash, <strong>\u20b1<\/strong>35,000 in trade receivables, and shelving worth <strong>\u20b1<\/strong>60,000, all of these are real accounts because their balances carry forward to the next month. They do not reset to zero at year-end like revenue or expense accounts.<\/p>\n<h3><b>1. Assets<\/b><\/h3>\n<p>Assets are resources the business owns or controls and can use to operate or generate value. Common examples include cash, bank balances, trade receivables, deposits, inventory, and fixed assets such as equipment or vehicles. <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/receivable-aging\/\">If you manage receivables<\/a>, tracking their aging helps you identify overdue balances before they affect cash flow.<\/p>\n<h3><b>2. Liabilities<\/b><\/h3>\n<p>Liabilities are amounts the business still owes to other parties. These may include trade payables, salary payables, taxes payable, rent payable, and bank loans. For instance, if the same store still owes a supplier <strong>\u20b1<\/strong>28,000 and has unpaid salaries of <strong>\u20b1<\/strong>12,000, both amounts are recorded as liabilities until the business settles them.<\/p>\n<h3><b>3. Equity<\/b><\/h3>\n<p>Equity is the owner\u2019s residual interest in the business after subtracting liabilities from assets. It usually includes owner\u2019s capital and retained earnings. For example, if a business has total assets of <strong>\u20b1<\/strong>215,000 and total liabilities of <strong>\u20b1<\/strong>40,000, its equity is <strong>\u20b1<\/strong>175,000. Because equity remains on the balance sheet and carries forward to the next period, it is also a real account.<\/p>\n<h2><b>Conclusion<\/b><\/h2>\n<p>Nominal accounts and real accounts serve different but equally important roles in your books. Nominal accounts, covering income and expenses, reset at the end of each fiscal period, giving you a clean view of performance per year. Real accounts, assets, liabilities, and equity carry their balances forward, reflecting your company&#8217;s financial position over time.<\/p>\n<p>For Philippine businesses, correctly classifying these accounts isn&#8217;t optional. The BIR expects your income statements and balance sheets to be accurate, and misclassification can trigger <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/audit-preparation\/\">audit findings<\/a> or penalties during tax filing season. Whether you handle it manually or through software, getting this right protects your business.<\/p>\n<p>If you&#8217;re still managing your books on spreadsheets or manual journals, it may be worth considering an upgrade. You can check out our comparison of the best <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/top-accounting-software-philippines\/\">accounting software options in the Philippines<\/a> to find a platform that fits your business size and compliance needs.<\/p>\n<p><strong style=\"color: #111111; font-family: Roboto, sans-serif; font-size: 27px;\">FAQ on Real and Nominal Accounts<\/strong><\/p>\n<ul class=\"bottom_faq\">\n<li>\n<details>\n<summary><strong>Can a single account be both real and nominal?<\/strong><\/summary>\n<p>No, an account is classified as either real or nominal based on its nature. Real accounts pertain to assets, liabilities, and equity, while nominal accounts relate to revenues, expenses, gains, and losses.<\/p>\n<\/details>\n<\/li>\n<li>\n<details>\n<summary><strong>How do real and nominal accounts impact financial statements differently?<\/strong><\/summary>\n<p>Real accounts appear on the balance sheet and reflect the company&#8217;s financial position at a point in time, carrying their balances forward. Nominal accounts are reported on the income statement, showing performance over a period, and are closed at period-end.<\/p>\n<\/details>\n<\/li>\n<li>\n<details>\n<summary><strong>Why is it important to distinguish between real and nominal accounts?<\/strong><\/summary>\n<p>Proper classification ensures accurate financial reporting, aids in applying the correct accounting rules, and helps in analyzing financial performance versus financial position.<\/p>\n<\/details>\n<\/li>\n<li>\n<details>\n<summary><strong>What is the process for closing nominal accounts?<\/strong><\/summary>\n<p>At the end of an accounting period, nominal account balances are transferred to the income summary account, which is then closed to retained earnings, resetting nominal accounts to zero for the next period.<\/p>\n<\/details>\n<\/li>\n<\/ul>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Can a single account be both real and nominal?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"No, an account is classified as either real or nominal based on its nature. 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A real account, covering assets, liabilities, and equity, carries its balance forward indefinitely. Getting these two mixed up leads to misclassified entries, wrong tax filings, and messy financial statements. For Philippine businesses filing with the BIR, that kind of [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":15302,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[157],"tags":[],"class_list":{"0":"post-15300","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-accounting"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.6 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Real vs Nominal Accounts: Key Differences &amp; Examples (2026)<\/title>\n<meta name=\"description\" content=\"Real and nominal accounts refer to permanent balances and temporary transactions. 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