All accounts in the general ledger are closed at a company's fiscal year end in order to facilitate preparation of the financial statements and to ready the accounts for the activities of the next year.

Question

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Not all accounts in the general ledger are closed at a company's fiscal year end. Only temporary accounts (revenues, expenses, dividends) are closed to prepare for the new fiscal year. Permanent accounts (assets, liabilities, equity) carry their balances forward into the next fiscal year.

All Accounts in the General Ledger Are Closed at a Company's