When closing entries are made:Select one:a. All ledger accounts are closed to start the new accounting period. b. All temporary accounts are closed but not the permanent accounts. c. All real accounts are closed but not the nominal accounts. d. All permanent accounts are closed but not the nominal accounts. e. All balance sheet accounts are closed.

Question

Mikaela Moore

Business

13 July, 11:19

When closing entries are made:Select one:a. All ledger accounts are closed to start the new accounting period. b. All temporary accounts are closed but not the permanent accounts. c. All real accounts are closed but not the nominal accounts. d. All permanent accounts are closed but not the nominal accounts. e. All balance sheet accounts are closed.

+1

Answers (1)

Know the Answer?

Aliyah · Answer 1

B) All temporary accounts are closed but not the permanent accounts.

Explanation:

The temporary accounts are closed each year to start the year with zero, these account are almost the income statement account, revenues, cost, expenses. etc.

These account's balances are not carried over to the next accounting period but the amounts are transfered to permanent or real accounts to the balance sheet. For Example, the Net Income of the year could be transferred to Retained Earnings in Equity Owners item of the balance sheet.