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 are closed at the end of the year?

Liability accounts

Common stock account

Asset accounts

Revenue accounts

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Verified step by step guidance

Understand the concept of closing entries: Closing entries are made at the end of an accounting period to transfer balances from temporary accounts (such as revenue, expenses, and dividends) to permanent accounts (such as retained earnings). This process resets the temporary accounts to zero for the next accounting period.

Identify temporary accounts: Temporary accounts include revenue accounts, expense accounts, and dividend accounts. These accounts are closed because they relate to a specific accounting period and need to start fresh in the next period.

Recognize permanent accounts: Permanent accounts include asset accounts, liability accounts, and equity accounts (such as common stock). These accounts are not closed because their balances carry over to the next accounting period.

Focus on the question: The problem asks which accounts are closed at the end of the year. Based on the explanation above, revenue accounts are temporary accounts and are closed at the end of the year.

Conclude the reasoning: Liability accounts, common stock accounts, and asset accounts are permanent accounts and are not closed at the end of the year. Only revenue accounts are closed to reset their balances for the next accounting period.