The entries that transfer the revenue,expense,and withdrawals balances to the Owner,Capital account to prepare the company's books for the next period are called ________.
A)closing entries
B)opening entries
C)adjusting entries
D)temporary accounts

Question

Quizplus · Accepted Answer

Closing entries are made at the end of an accounting period to zero out the temporary accounts (revenue, expense, and withdrawals) and transfer their balances to the Owner's Capital account. This prepares the company's books for the next period by starting with zero balances in these temporary accounts. Opening entries are made at the beginning of a new accounting period to establish initial account balances, while adjusting entries are made to correct errors or adjust account balances during the current accounting period.

The Entries That Transfer the Revenue,expense,and Withdrawals Balances to the Owner,Capital