The purpose of closing entries is to
A) adjust the accounts in the ledger.
B) set nominal account balances to zero to begin the next period.
C) set real account balances to zero to begin the next period.
D) help in preparing financial statements.

Question

Quizplus · Accepted Answer

Closing entries are made at the end of the accounting period to transfer the balances of temporary accounts (revenue, expense, and dividend accounts) to the retained earnings account, which is a permanent account. This process sets nominal account balances to zero to begin the next period, and prepares the financial statements.

The Purpose of Closing Entries Is to