Closing entries transfer the balances of all temporary accounts (revenues,expenses,and dividends)to the balance of the Common Stock account.

Question

Quizplus · Accepted Answer

The balances of temporary accounts are actually transferred to the Retained Earnings account, not the Common Stock account, as temporary accounts only represent transactions from a specific period, and their balances must be closed out or transferred to Retained Earnings to measure the company's net income (or loss) for that period.

Closing Entries Transfer the Balances of All Temporary Accounts (Revenues,expenses,and