The closing process is necessary in order to:
A)Calculate net income or net loss for an accounting period.
B)Ensure that all permanent accounts are closed to zero at the end of each accounting period.
C)Ensure that the company complies with state laws.
D)Ensure that net income or net loss and dividends for the period are closed into the retained earnings account.
E)Ensure that management is aware of how well the company is operating.

Question

Quizplus · Accepted Answer

The closing process involves transferring net income or net loss and dividends to the retained earnings account, ensuring that temporary accounts are reset for the next accounting period.

The Closing Process Is Necessary in Order To