When closing entries are made
A) All ledger accounts are closed to start the new fiscal period
B) All temporary accounts are closed but not the permanent accounts
C) All permanent accounts are closed but not the temporary accounts.
D) All permanent accounts are closed but not the temporary accounts
E) All balance sheet accounts are closed

Question

Quizplus · Accepted Answer

Closing entries are made to close all temporary accounts (revenues, expenses, dividends) to a permanent account (usually Retained Earnings) to prepare the company's books for the next fiscal period. Permanent accounts, such as assets, liabilities, and equity accounts, are not closed.

When Closing Entries Are Made