The primary purpose of closing entries is to:
A)Prove the equality of the debit and credit entries in the general journal.
B)Ensure that all assets and liabilities are recognized in the appropriate period.
C)Update the balance of Retained Earnings and prepare revenue,expense,and dividend accounts for next period's transactions.

Question

Quizplus · Accepted Answer

The primary purpose of closing entries is to update the balance of Retained Earnings and prepare revenue, expense, and dividend accounts for the next period's transactions. This is done by transferring the balances of these accounts to the Retained Earnings account and setting them to zero for the next period. Closing entries do not directly relate to proving the equality of debit and credit entries or ensuring that assets and liabilities are recognized in the appropriate period.

The Primary Purpose of Closing Entries Is To