Closing entries may be prepared from all of the following except

Question

Quizplus · Accepted Answer

Closing entries are prepared based on the adjusted balances in the ledger and the income statement and balance sheet columns of the worksheet. The purpose of closing entries is to reset temporary accounts to zero and transfer their balances to permanent accounts. The balance sheet is not used to prepare closing entries as it is a statement of financial position at a specific point in time and does not involve the period's transactions. The Income and owner's equity statements are used to prepare closing entries, specifically to transfer the net income or loss to the retained earnings account.

Closing Entries May Be Prepared from All of the Following