Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming year and to update the owner's capital account for the events of the year just finished are
A) Adjusting entries
B) Closing entries
C) Final entries
D) Work sheet entries
E) None of these answers is correct.

Question

Quizplus · Accepted Answer

Closing entries are recorded at the end of each accounting period to close out the revenue, expense, and withdrawals accounts and transfer their balances to the owner's capital account. This process prepares the accounts for the upcoming year and updates the owner's capital account for the events of the year just finished. Adjusting entries are recorded throughout the accounting period to ensure that the financial statements are accurate and complete, while final entries and worksheet entries are not commonly used terms in accounting.

Journal Entries Recorded at the End of Each Accounting Period