All accounts in the general ledger are closed at a company's fiscal year end in order to facilitate preparation of the financial statements and to ready the accounts for the activities of the next year.

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Not all accounts in the general ledger are closed at a company's fiscal year end. Only revenue, expense, dividends, and income summary accounts (temporary accounts) are closed to prepare for the new fiscal year. Asset, liability, and equity accounts (permanent accounts) are not closed; their balances are carried forward to the next fiscal year.

All Accounts in the General Ledger Are Closed at a Company's