A balance sheet account with a debit balance requires a closing entry that credits that account, because a credit closing entry will result in a zero ending balance in the account.

Question

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Balance sheet accounts, such as assets, liabilities, and equity, are not closed at the end of the accounting period. Only revenue, expense, and dividend accounts, which are income statement accounts, are closed to prepare the accounts for the next period.

A Balance Sheet Account with a Debit Balance Requires a Closing