Closing entries are designed to transfer the end-of-period balances in the revenue accounts,the expense accounts,and the dividends account to retained earnings.

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Closing entries are used to transfer the balances of temporary accounts (revenue, expense, and dividends) to the permanent account (retained earnings) at the end of the accounting period. This is done to reset the temporary accounts to zero and begin the next period with only the balances of permanent accounts.

Closing Entries Are Designed to Transfer the End-Of-Period Balances in the Revenue