Closing entries are prepared for which of the following reasons?
A)To get the accounts ready for the next accounting period
B)To get the worksheet ready for the next accounting period
C)To get the journal ready for the next accounting period
D)To get the financial statements ready for the next accounting period

Question

Quizplus · Accepted Answer

Closing entries are prepared to finalize the accounts for the current accounting period so that the books can be opened for the next period. By closing the temporary accounts (revenue, expenses, and dividends), the balances are transferred to the permanent accounts for recording in the next period. This ensures that the next period's financial statements are accurate and only reflect transactions from that period.

Closing Entries Are Prepared for Which of the Following Reasons