The correct answer is B. Nominal account.
A nominal account is an account that is used to record income and expenses. It is a temporary account that is closed at the end of the accounting period.
The balance of a nominal account is transferred to the profit and loss account, which is then used to calculate the net profit or loss for the period.A real account is an account that is used to record assets, liabilities, and equity. It is a permanent account that is not closed at the end of the accounting period. The balance of a real account is carried forward to the next accounting period.
A personal account is an account that is used to record transactions with individuals or businesses. It is a permanent account that is not closed at the end of the accounting period. The balance of a personal account is carried forward to the next accounting period.
Here is a table that summarizes the key differences between nominal, real, and personal accounts:
| Account type | Purpose | Treatment at the end of the accounting period |
| — | — | — |
| Nominal account | Records income and expenses | Closed at the end of the accounting period and the balance is transferred to the profit and loss account |
| Real account | Records assets, liabilities, and equity | Not closed at the end of the accounting period and the balance is carried forward to the next accounting period |
| Personal account | Records transactions with individuals or businesses | Not closed at the end of the accounting period and the balance is carried forward to the next accounting period |