Closing entries are required:
A)If management has decided to cease operating the business.
B)Only if the company adheres to the accrual method of accounting.
C)If a company's bookkeeper does not choose to prepare reversing entries.
D)So that Revenue,expense,and dividends accounts must begin each period with zero balances.
E)In order to satisfy the Internal Revenue Service guidelines.

Question

Quizplus · Accepted Answer

Closing entries are necessary to reset the temporary accounts including revenue, expense, and dividends accounts to zero balances at the end of each accounting period. This is required under the accrual accounting method to calculate the accurate net income for the period.

Closing Entries Are Required