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 will NOT be closed during the closing process?

Dividends

Service Revenue

Retained Earnings

Salaries Expense

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Verified step by step guidance

Step 1: Understand the closing process in accounting. The closing process involves transferring the balances of temporary accounts (such as revenues, expenses, and dividends) to permanent accounts (such as Retained Earnings). Temporary accounts are closed to reset their balances to zero for the next accounting period.

Step 2: Identify the temporary accounts listed in the problem. Temporary accounts include Dividends, Service Revenue, and Salaries Expense. These accounts are closed during the closing process.

Step 3: Recognize that Retained Earnings is a permanent account. Permanent accounts are not closed during the closing process because their balances carry forward to the next accounting period.

Step 4: Confirm that Retained Earnings is the correct answer because it is a permanent account and will not be closed during the closing process.

Step 5: Review the purpose of closing entries. Closing entries are made to update the Retained Earnings account with the net income or loss and dividends for the period, but the Retained Earnings account itself remains open and is not reset to zero.