The purpose of closing entries is to transfer:

Question

Quizplus · Accepted Answer

The purpose of closing entries is to transfer the balances in temporary accounts (revenue, expense, and dividend accounts) to a permanent account such as retained earnings. This process resets the temporary accounts to zero to prepare them to accumulate new transactions in the next accounting period. Closing entries are necessary to ensure accurate financial statements and prevent the mixing of income and expenses from different periods. The other options listed do not accurately describe the purpose of closing entries.

The Purpose of Closing Entries Is to Transfer