Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Closing Entries

Financial Accounting

3. Accrual Accounting Concepts

Closing Entries

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Multiple Choice

Which of the following accounts is NOT closed at the end of the accounting period?

Service Revenue

Owner's Capital

Rent Expense

Utilities Expense

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Verified step by step guidance

Step 1: Understand the concept of closing entries. Closing entries are made at the end of an accounting period to transfer the balances of temporary accounts (such as revenues, expenses, and withdrawals) to permanent accounts (such as Owner's Capital). Temporary accounts are reset to zero for the next accounting period.

Step 2: Identify temporary accounts. Temporary accounts include revenue accounts (e.g., Service Revenue), expense accounts (e.g., Rent Expense, Utilities Expense), and withdrawal accounts. These accounts are closed to prepare for the next accounting period.

Step 3: Recognize permanent accounts. Permanent accounts, such as Owner's Capital, are not closed at the end of the accounting period. Their balances are carried forward to the next period.

Step 4: Analyze the options provided in the problem. Service Revenue, Rent Expense, and Utilities Expense are temporary accounts that are closed at the end of the accounting period. Owner's Capital is a permanent account and is not closed.

Step 5: Conclude that the correct answer is Owner's Capital, as it is a permanent account and its balance is carried forward to the next accounting period.