Closing the temporary accounts at the end of each accounting period:
A) Serves to transfer the effects of these accounts to the proper equity account on the balance sheet.
B) Prepares the withdrawals account for use in the next period.
C) Gives the revenue and expense accounts zero balances.
D) Gives the withdrawals account a zero balance.
E) All of these answers are correct.

Question

Quizplus · Accepted Answer

Closing the temporary accounts (revenue, expense, and withdrawals) serves to transfer their effects to the proper equity accounts on the balance sheet, prepares the withdrawals account for use in the next period, and gives the revenue and expense accounts zero balances. As a result, all of the answers are correct.

Closing the Temporary Accounts at the End of Each Accounting