Which of the following is not true about closing entries?
A) There are four closing entries that update the retained earnings account.
B) After the second closing entry, the income summary account is equal to the net income or (loss) for the period.
C) All real accounts are closed at the end of the period.
D) By closing nominal accounts at the end of the period to zero, it is possible to isolate next period's information correctly.

Question

Quizplus · Accepted Answer

Real accounts, also known as permanent accounts, are not closed at the end of the period; only nominal accounts (temporary accounts) are closed.

Which of the Following Is Not True About Closing Entries