diff --git a/frame/evm-system/src/lib.rs b/frame/evm-system/src/lib.rs
index 497f1c1e86..d69eb10cbb 100644
--- a/frame/evm-system/src/lib.rs
+++ b/frame/evm-system/src/lib.rs
@@ -160,16 +160,19 @@ impl<T: Config> Pallet<T> {
 
 	/// Increment a particular account's nonce by 1.
 	pub fn inc_account_nonce(who: &<T as Config>::AccountId) {
-		Account::<T>::mutate(who, |a| {
-			a.nonce += <T as Config>::Index::one();
-
-			// Meaning that account is being created.
-			if a.nonce == <T as Config>::Index::one()
-				&& a.data == <T as Config>::AccountData::default()
-			{
-				Self::on_created_account(who.clone());
-			}
+		let is_new_account = Account::<T>::mutate_exists(who, |maybe_account| {
+			let is_new_account = maybe_account.is_none();
+
+			let account = maybe_account.get_or_insert_default();
+			account.nonce += <T as Config>::Index::one();
+
+			is_new_account
 		});
+
+		// Meaning that account is being created.
+		if is_new_account {
+			Self::on_created_account(who.clone());
+		}
 	}
 
 	/// Create an account.
diff --git a/frame/evm-system/src/tests.rs b/frame/evm-system/src/tests.rs
index 2a797e966b..34e18378a9 100644
--- a/frame/evm-system/src/tests.rs
+++ b/frame/evm-system/src/tests.rs
@@ -113,14 +113,17 @@ fn remove_account_fails() {
 	});
 }
 
-/// This test verifies that incrementing account nonce works in the happy path.
+/// This test verifies that incrementing account nonce works in the happy path
+/// in case a new account should be created.
 #[test]
-fn inc_account_nonce_works() {
+fn inc_account_nonce_account_created() {
 	new_test_ext().execute_with_ext(|_| {
 		// Prepare test data.
 		let account_id = H160::from_str("1000000000000000000000000000000000000001").unwrap();
 
 		// Check test preconditions.
+		assert!(!EvmSystem::account_exists(&account_id));
+
 		let nonce_before = EvmSystem::account_nonce(&account_id);
 
 		// Set block number to enable events.
@@ -139,6 +142,7 @@ fn inc_account_nonce_works() {
 
 		// Assert state changes.
 		assert_eq!(EvmSystem::account_nonce(&account_id), nonce_before + 1);
+		assert!(EvmSystem::account_exists(&account_id));
 		System::assert_has_event(RuntimeEvent::EvmSystem(Event::NewAccount {
 			account: account_id,
 		}));
@@ -147,12 +151,36 @@ fn inc_account_nonce_works() {
 		EvmSystem::inc_account_nonce(&account_id);
 		// Assert state changes.
 		assert_eq!(EvmSystem::account_nonce(&account_id), nonce_before + 2);
+		assert!(EvmSystem::account_exists(&account_id));
 
 		// Assert mock invocations.
 		on_new_account_ctx.checkpoint();
 	});
 }
 
+/// This test verifies that incrementing account nonce works in the happy path
+/// in case an account already exists.
+#[test]
+fn inc_account_nonce_account_exists() {
+	new_test_ext().execute_with_ext(|_| {
+		// Prepare test data.
+		let account_id = H160::from_str("1000000000000000000000000000000000000001").unwrap();
+		<Account<Test>>::insert(account_id.clone(), AccountInfo::<_, _>::default());
+
+		// Check test preconditions.
+		assert!(EvmSystem::account_exists(&account_id));
+
+		let nonce_before = EvmSystem::account_nonce(&account_id);
+
+		// Invoke the function under test.
+		EvmSystem::inc_account_nonce(&account_id);
+
+		// Assert state changes.
+		assert!(EvmSystem::account_exists(&account_id));
+		assert_eq!(EvmSystem::account_nonce(&account_id), nonce_before + 1);
+	});
+}
+
 /// This test verifies that try_mutate_exists works as expected in case data wasn't providing
 /// and returned data is `Some`. As a result, a new account has been created.
 #[test]