Asked by Divine Diamante on Jun 21, 2024
Verified
The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.
Accounting Cycle
A series of steps followed by an organization to track and process financial transactions, from the initial transaction to its inclusion in the financial statements.
Next Accounting Period
The future timeline or interval for which financial records will be prepared and analyzed, immediately following the current reporting period.
- Familiarize oneself with the significance and processes associated with closing entries in resetting temporary accounts for the ensuing accounting cycle.
Verified Answer
JF
Jeremy FisherJun 22, 2024
Final Answer :
True
Explanation :
The closing process involves closing temporary accounts, such as revenue and expense accounts, and transferring their balances to the retained earnings account. This prepares the accounts for the next accounting period.
Learning Objectives
- Familiarize oneself with the significance and processes associated with closing entries in resetting temporary accounts for the ensuing accounting cycle.
Related questions
Closing Entries Are Designed to Transfer the End-Of-Period Balances in ...
Closing Entries Are Necessary So That Retained Earnings Will Begin ...
Closing Revenue and Expense Accounts at the End of the ...
The Income Statement Debit Column of the Worksheet Showed the ...
Closing Entries Are Dated in the Journal as of ...