What is the goal of the closing process?

A) to verify that all adjustments have been made
B) to make sure all temporary accounts have a zero balance
C) to move all equity accounts to Retained Earnings
D) to end the accounting period with a profit

Closing Process

The closing process in accounting involves summarizing all revenues and expenses for the period and transferring the balances to the owner's equity account to prepare for the next accounting period.

Temporary Accounts

These are accounts that are closed at the end of each accounting period, including revenues, expenses, dividends, and income summary accounts, to prepare the company for a new accounting period.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to reinvest in its business or to pay debt.