Closing entries are made at the end of the accounting period to prepare the accounts for the next period's transactions. This involves closing out temporary revenue and expense accounts and transferring their balances to the retained earnings account. Closing entries are not made at the beginning of the accounting period, cannot be done using a computer, and are different from adjusting entries.

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Closing Entries

Question 143

Multiple Choice

Closing entries:

A) are made at the beginning of each accounting period.
B) prepare the accounts for the next period's transaction.
C) cannot be done using a computer.
D) are the same as adjusting entries.

Correct Answer: