Capital Reduction Account Overview

Front

What type of account is the Capital Reduction Account?

Back

It is a nominal account.

Front

Is the Capital Reduction Account a temporary or permanent account?

Back

It is a temporary account.

Front

What is credited to the Capital Reduction Account?

Back

All profits and gains.

Front

What is debited to the Capital Reduction Account?

Back

All losses and expenses.

Front

What happens to the Capital Reduction Account if an asset increases?

Back

Capital Reduction is debited.

Front

What happens to the Capital Reduction Account if an asset decreases?

Back

Capital Reduction Account is credited.

Front

What happens to the Capital Reduction Account if actual liability increases?

Back

It is debited.

Front

What happens to the Capital Reduction Account if actual liability decreases?

Back

It is credited.

Front

What may happen to the balance of the Capital Reduction Account?

Back

It may tally or it may get a balance on the debit side.

Front

Where is the balance on the debit side of the Capital Reduction Account transferred?

Back

To the Capital Reserve Account.