Which of the following is correct?
A)Balance sheet accounts are considered permanent accounts and these accounts have balances that are closed each year.
B)Balance sheet accounts are considered permanent accounts and these accounts have balances that are carried forward from year to year.
C)Balance sheet accounts are considered temporary accounts and these accounts have balances that are carried forward from year to year.
D)Profit and Loss accounts are considered permanent accounts and these accounts have balances that are closed each year.

Question

Quizplus · Accepted Answer

Balance sheet accounts are considered permanent accounts because their balances are carried forward from year to year rather than being closed at the end of each year, as in the case of temporary accounts. Temporary accounts include those accounts that are used to record revenue, expenses, gains, and losses, and their balances are closed at the end of each accounting period. Profit and Loss accounts are temporary accounts, not permanent accounts.

Which of the Following Is Correct