Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 31 - No. 11)
What are the purposes of closing entries at the end of an accounting period?
To transfer balances of temporary accounts to the permanent account.
To reduce the balances of temporary accounts to zero.
To adjust the balance of the cash account.
To record the assets and liability balances.
Explanation
Closing entries reduce temporary accounts to zero and transfer the balances to retained earnings.
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