Closing entries impact the income statement but do not have an impact on the statement of financial position.

Name: Closing entries impact the income statement but do not have an impact on the statement of financial position.
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Question

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Closing entries impact both the income statement and the statement of financial position. The purpose of closing entries is to transfer net income (or loss) and dividends to the retained earnings account, which is a component of the statement of financial position.

Closing Entries Impact the Income Statement but Do Not Have