Permanent accounts are also known as real accounts and are not closed at the end of the accounting year. Instead, their ending balance from one year becomes their beginning balance for the next year, as they represent assets, liabilities, and equity that continue from one accounting period to the next. Therefore, choice D is the correct answer.

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Permanent Accounts

Question 63

Multiple Choice

Permanent accounts:

A) never have zero balances.
B) have their balances zeroed-out at the end of each accounting year.
C) do not have their year-end balance carried into the next year.
D) Have their ending balance from one year become its begining balance for the following year.

Correct Answer: