Closing entries deal primarily with the balances of real accounts.

Name: Closing entries deal primarily with the balances of real accounts.
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Closing entries are made to transfer the balances of temporary accounts (revenues, expenses, and dividends) to a permanent equity account, typically the retained earnings account, not real accounts. Real accounts, like assets, liabilities, and equity accounts, are not closed at the end of the accounting period.

Closing Entries Deal Primarily with the Balances of Real Accounts