Practice question · Select all that apply
Which accounts are zeroed out during the closing process?
Hints
- Only period-specific accounts get reset.
- Anything the firm still physically holds carries forward.
Show the answer
- A. Cost of Goods Sold
- C. Interest Expense
- D. Sales Revenue
Why
Revenue and expense accounts are temporary, they reset each period. Cash is permanent: it carries forward because the firm still has it.
Practise The Accounting Cycle
The app has 5 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on The Accounting Cycle
- The trial balance balances perfectly. Can we be sure there are no errors?
- The closing entry transfers the net profit or loss into the retained earnings account.
- At period end, revenue and expense accounts are closed to zero while assets and liabilities carry forward.…
- Order the accounting cycle.
- Temporary or permanent? Sort each account.
- Match each source document to the transaction it evidences.
- A trial balance balances perfectly and the accounts still contain errors. Which class of error does it…