Formal closing entries ultimately will affect

Name: Formal closing entries ultimately will affect
Brand: Quizplus
Rating: 5.0 (56 reviews)

Question

Quizplus · Accepted Answer

Formal closing entries are recorded to close temporary accounts such as revenue and expense accounts and transfer their balances to the Retained Earnings account. Therefore, the formal closing entries ultimately affect the Retained Earnings account. The other accounts listed (Common Stock, total Liabilities, and total Assets) are not directly impacted by the closing entries.

Formal Closing Entries Ultimately Will Affect