Assets, liabilities, and equity accounts are not closed; these accounts are called:
A) Nominal accounts.
B) Temporary accounts.
C) Permanent accounts.
D) Contra accounts.
E) Accrued accounts.

Question

Quizplus · Accepted Answer

Assets, liabilities, and equity accounts are not closed at the end of an accounting period because they represent the ongoing financial positions of a company. These accounts are called permanent accounts because they are carried forward to subsequent accounting periods. Nominal accounts and temporary accounts, on the other hand, are closed at the end of an accounting period because they represent revenues, expenses, gains, and losses that relate to a specific period. Contra accounts are used to offset the balance of another account, and accrued accounts represent expenses or revenues that have been earned or incurred but for which payment or collection has not yet been made.

Assets, Liabilities, and Equity Accounts Are Not Closed; These Accounts