One of the purposes of closing entries is to transfer net income or net loss for the period to the owner's capital account.

Question

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Closing entries involve transferring the balances of temporary accounts, such as revenue and expense accounts, to the permanent owner's equity account. This transfer includes the net income or net loss for the period, which ultimately affects the owner's capital account. Therefore, the purpose of closing entries is to transfer net income or net loss for the period to the owner's capital account.

One of the Purposes of Closing Entries Is to Transfer