The correct answer is: D. All of these
A nominal account is a type of account that is used to record expenses and revenues. It is also known as a temporary account because it is closed at the end of each accounting period. The three examples given in the question, wages, patent, and prepaid, are all examples of nominal accounts.
Wages are an expense that is incurred by a business when it hires employees to work for it. Patents are an asset that is owned by a business and that gives it the exclusive right to use a particular invention for a certain period of time. Prepaid expenses are expenses that have been paid for in advance but have not yet been used.
All of these accounts are recorded in the nominal ledger, which is a book of accounts that is used to record all of the business’s income and expenses. The nominal ledger is also known as the profit and loss account.
At the end of each accounting period, the balances of all of the nominal accounts are transferred to the profit and loss account. The profit and loss account shows the business’s net income or loss for the period. The net income or loss is then transferred to the balance sheet, which is a statement of the business’s financial position at the end of the period.