Because the balance at the end of one accounting period becomes the opening balance at the start of the next period, balance sheet accounts are known as:
A) temporary accounts.
B) permanent accounts.
C) long-term accounts.
D) multi-period accounts.

Question

Quizplus · Accepted Answer

Balance sheet accounts are considered permanent accounts because they are not closed out at the end of each accounting period. Instead, their balances are carried forward to the next accounting period, which makes them an integral part of a company's financial position. Temporary accounts, on the other hand, are closed out at the end of each period and include revenue, expense, and dividend accounts.

Because the Balance at the End of One Accounting Period