Assets, liabilities, and equity accounts are not closed; these accounts are called:
A) Temporary accounts.
B) Contra accounts.
C) Accrued accounts.
D) Nominal accounts.
E) Permanent accounts.

Question

Quizplus · Accepted Answer

Assets, liabilities, and equity accounts are not closed at the end of an accounting period; they are carried forward to the next period. Hence, these accounts are called permanent accounts. Temporary accounts, on the other hand, are closed at the end of an accounting period, and their balances are transferred to the retained earnings or owner's equity account. Contra accounts are used to reduce the balance of another account, such as accumulated depreciation, which is used to reduce the balance of the asset account it is associated with. Accrued accounts refer to revenues or expenses that have been incurred but not yet received or paid. Nominal accounts are revenue, expense, and dividend accounts, which are temporary accounts.

Assets, Liabilities, and Equity Accounts Are Not Closed; These Accounts