Closing entries will update the Capital account to the same figure that is on the balance sheet for that date.

Question

Quizplus · Accepted Answer

Closing entries are made at the end of an accounting period to transfer the balances of temporary accounts (like revenues, expenses, and dividends) to the permanent Capital account, thus updating it to reflect the net income or loss and dividends for the period, which matches the figure on the balance sheet.

Closing Entries Will Update the Capital Account to the Same