The entries that transfer the revenue, expense, and withdrawal balances to the Owner's Name, Capital account to set these balances to zero for the next period are called:
A)closing entries.
B)opening entries.
C)adjusting entries.
D)temporary accounts.

Question

Quizplus · Accepted Answer

Closing entries are made at the end of the accounting period to transfer the balances of revenue, expense, and withdrawal accounts to the Owner's Name, Capital account. This is done to set these balances to zero for the next period. Opening entries are made at the beginning of a new accounting period to zero out the balances of temporary accounts. Adjusting entries are made to update accounting records for accruals, prepayments, and other items. Temporary accounts are accounts used to record transactions for a single accounting period, such as revenue, expenses, and withdrawals.

The Entries That Transfer the Revenue, Expense, and Withdrawal Balances