Nominal ledger excludes cash book accounts

Steps:

• Identify nominal ledger as the main record for impersonal accounts like assets, liabilities, equity, and expenses.
• Note cash book as a separate subsidiary ledger for cash and bank transactions.
• Classify each option: capital (equity), inventory (asset), purchases (expense) are nominal; cash is cash book.
• Confirm cash postings bypass nominal ledger directly.

Why B is correct:

• Cash follows the cash book principle in double-entry bookkeeping, maintaining separate records for liquidity control, not nominal ledger.

Why the others are wrong:

• A. Capital: Equity account posted to nominal ledger for balance sheet.
• C. Inventory: Asset account tracked in nominal ledger for valuation.
• D. Purchases: Nominal expense account recorded in nominal ledger for P&L.

Final answer: B