Which of the following accounts are closed in the closing entries?
A) Operating income and Cost of goods sold
B) Cost of goods sold, Sales returns and allowances, and Sales discounts
C) Gross profit, Sales returns and allowances, and Sales discounts
D) Operating expenses, Sales revenue, and Gross profit

Question

Quizplus · Accepted Answer

Closing entries are used to close temporary accounts at the end of an accounting period. This includes revenue and expense accounts, such as Cost of goods sold, Sales returns and allowances, and Sales discounts, to transfer their balances to permanent accounts. Gross profit and Operating income are not accounts that are directly closed; they are calculations used within the income statement. Operating expenses and Sales revenue are indeed closed, but Gross profit is a result of the income statement calculation, not an account that is directly closed through journal entries.

Which of the Following Accounts Are Closed in the Closing