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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Why are closing entries required at the end of an accounting period?

To determine

Closing Entries: Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts such as retained earnings. It is passed at the end of the accounting period, to transfer the final balance.

To Explain: Why closing entries are closed at the end of an accounting period.

Explanation

  • Closing entries helps to bring all the accounts balance of revenues, expenses, income summary, and dividends to zero value. This helps to determine the net income or net loss accurately.
  • Closing entries transfers all revenues and expense...

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