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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Which of the following accounts would be closed during the closing process?

  1. a. Service Revenue
  2. b. Cash
  3. c. B. Williams, Capital
  4. d. Accumulated Depreciation, Equipment

To determine

Find the correct option, the option that indicates the account that is closed during closing process.

Explanation

Closing entries: The journal entries prepared to close the temporary accounts to capital account are referred to as closing entries. The revenue, expense, and drawing accounts are referred to as nominal or temporary accounts because the information and figures in these accounts is held temporarily and consequently transferred to real or permanent account at the end of accounting year.

Justification for correct answer: The amounts of revenue, expenses, and drawings accounts recorded in the financial statements should always pertain to only one fiscal period...

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