Asked by Heather Hernandez on Jun 24, 2024
Verified
All income statement accounts will be closed at the end of the period.
Income Statement
A report detailing a corporation's earnings and expenditures throughout a particular time frame, leading to either a profit or a deficit.
Accounts Closed
The process of zeroing out balances in temporary accounts and transferring their balances to permanent accounts at the end of an accounting period.
End of Period
A point in time that marks the conclusion of a reporting period, such as a fiscal quarter or year, used for financial reporting and analysis.
- Acquire knowledge about the intention and the sequence of actions for closing entries in the accounting realm.
Verified Answer
GH
Garrison HawkinsJun 25, 2024
Final Answer :
True
Explanation :
This is known as the closing process, where all revenue and expense accounts are transferred to the retained earnings account, which is a part of the balance sheet, at the end of the period. This helps to start the new accounting period with zero balances in the income statement accounts.
Learning Objectives
- Acquire knowledge about the intention and the sequence of actions for closing entries in the accounting realm.