At the beginning of the fiscal year an entity's permanent and temporary accounts should all have a zero balance.

Name: At the beginning of the fiscal year an entity's permanent and temporary accounts should all have a zero balance.
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At the beginning of the fiscal year, only temporary accounts (revenues, expenses, dividends/distributions) are reset to zero. Permanent accounts (assets, liabilities, equity) carry their ending balances from the prior year into the new fiscal year.

At the Beginning of the Fiscal Year an Entity's Permanent