The purpose of making closing entries is to:
A)Prepare revenue and expense accounts for the recording of the next period's revenue and expenses.
B)Enable the accountant to transfer the balances from all permanent accounts to the Income Summary account.
C)Establish new balances in the balance sheet accounts.
D)Reduce the number of expense accounts.

Question

Quizplus · Accepted Answer

Closing entries are made to reset the balances of revenue and expense accounts to zero in preparation for the next accounting period, allowing for the recording of new transactions related to revenue and expenses.

The Purpose of Making Closing Entries Is To