Closing entries:

Question

Closing entries:

Quizplus · Accepted Answer

Closing entries are made at the end of the accounting period, after the financial statements have been prepared, in order to close out revenue and expense accounts and transfer their balances to the owner's equity account. They prepare the accounts for the next period's transactions by resetting the revenue and expense accounts to zero so that they start with a clean slate in the next period. Closing entries can be done manually or with a computer. They are different from adjusting entries, which are made during the accounting period to record transactions that have not yet been entered, such as accrued expenses or depreciation.

Closing Entries