Which is not a temporary account
Which is not a temporary account

Which is not a temporary account? – Detailed Analysis

It can be hard to understand the differences between temporary and regular accounts in accounting. For good budgeting and money management, you need to know this. 

This article will talk about What is not a temporary account. We’ll talk about the most important things about each type of account and look at which one belongs outside the category of a temporary account.

Which is not a temporary account?

A) Interest income

B) Sales returns & allowances

C) Inventory

D) Interest expense

E) Rent income

What is not a temporary accountThe correct answer is C): “Inventory” 

What is a Temporary Account?

There is no money in a temporary account at the end of each financial period. It opens with no money in it the next period. They are closed, so their amounts stay consistent with the balances of the next accounting period. The goal is to show how much money was made and what was done in accounting during different periods.

Unearned Revenue is NOT a temporary account:

Real accounts, also referred to as permanent accounts, are ones that have balances that increase over time. At the end of the year, they are not closed and reduced to zero.

On the balance sheet, they are frequently the accounts for assets, liabilities, and equity. Unearned revenue is regarded as a permanent account rather than a temporary account since it is a liability account.

Different between temporary and Permanent account

  • Permanent Accounts: This balance sheet account shows how the business is doing financially over time. There are equity accounts, debt accounts, and asset accounts among them.
  • Temporary Accounts: These accounts on the income statement are used to keep track of accounting actions over a specific period. They have accounts for income, accounts for expenses, and accounts for taking money.

Equity is the only account that’s not temporary. They stay the same over time because stock accounts are part of the balance sheet and show how the business is doing financially.

Account Type Revenue Equity Expense Drawings
Temporary Yes No Yes Yes
Permanent No Yes No No

Also Read


There are two types of accounts: those that are permanent and those that are temporary, meaning they exist for a limited period. 

Which is not a temporary account? Savings account, checking, credit card, and inventory accounts are non-temporary accounts. Concurrently, temporary accounts include income, costs, cost of products sold, income tax expense, unearned revenue, payroll tax expense, and interest income. Understanding these accounts could help a person and the company by facilitating sound financial management.


What is an example of a temporary account?

All accounts on the income statement, including the income summary, revenue, and expense accounts, are regarded as temporary accounts.

What are temporary accounts?

An account closed at the end of each accounting period and has a zero balance at the beginning of the next is known as a transitory account. 

Is inventory a temporary account?

No, inventory is not a temporary account.

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