At the end of the accounting period,the balances in the nominal accounts are closed while the balances in the real accounts are carried forward to the next accounting period.

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This is the basic concept of closing entries in accounting. Nominal accounts, which include revenue, expense, and dividend accounts, are closed at the end of the accounting period by transferring their balances to the retained earnings account. Real accounts, such as asset, liability, and equity accounts, are not closed but their balances are carried forward to the next accounting period.

At the End of the Accounting Period,the Balances in the Nominal