Closing entries are prepared for which of the following reasons?

Question

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Closing entries are prepared at the end of an accounting period to close temporary accounts (revenue, expenses, and dividends) and transfer their balances to the permanent accounts (assets, liabilities, and equity). This process allows the accounts to be ready for the next accounting period by starting with a clean slate and accurate beginning balances in the permanent accounts. Closing entries do not affect the worksheet or journal and are not relevant for getting the financial statements ready for the next accounting period, as they are prepared from the adjusted trial balance after closing entries have been made.

Closing Entries Are Prepared for Which of the Following Reasons