Closing entries are made
A) in order to terminate the business as an operating entity.
B) so that all assets, liabilities, and owner's capital accounts will have zero balances when the next accounting period starts.
C) in order to transfer profit (or loss) and owner's drawings to the Owner's Capital account.
D) so that financial statements can be prepared.

Question

Quizplus · Accepted Answer

Closing entries are made in order to transfer profit (or loss) and owner's drawings to the Owner's Capital account. This is done to summarize the revenue and expense accounts for the period and to prepare the accounts to start recording transactions for the next period.

Closing Entries Are Made