Closing the temporary accounts at the end of each accounting period does all of the following except:
A) Serves to transfer the effects of these accounts to the owner's capital account on the balance sheet.
B) Prepares the withdrawals account for use in the next period.
C) Gives the revenue and expense accounts zero balances.
D) Has no effect on the owner's capital account.
E) Causes owner's capital to reflect increases from revenues and decreases from expenses and withdrawals.

Question

Quizplus · Accepted Answer

Closing temporary accounts involves transferring their balances to the owner's capital account, affecting it by reflecting the period's net income or loss and withdrawals. Thus, saying it has no effect on the owner's capital account is incorrect.

Closing the Temporary Accounts at the End of Each Accounting