Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 41 - No. 25)
Which of the following is the purpose of the closing process in accounting?
To bring temporary accounts to zero.
To transfer the balances of revenue accounts to retained earnings.
To prepare financial statements.
To calculate the ending cash balance.
Explanation
The closing process zeroes out temporary accounts and transfers their balances to retained earnings, preparing for the next accounting period.
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