Ask Question
22 June, 16:45

The primary purpose of closing entries is to:Prove the equality of the debit and credit entries in the general journal. Ensure that all assets and liabilities are recognized in the appropriate period. Update the balance of Retained Earnings and prepare revenue, expense, and dividend accounts for next period's transactions. Assure that adjusting entries balance.

+1
Answers (1)
  1. 22 June, 20:44
    0
    The answer is : to Update the balance of Retained Earnings and prepare revenue, expense, and dividend accounts for next period's transactions

    Explanation:

    The closing entries is to set the accounts' balance of temporary account to zero by transferring these balance to other permanent accounts at the end of the accounting cycles.

    Temporary accounts includes accounts of revenues and expenses and dividend payment. Permanent account is Retained Earnings.

    As Revenues and expenses are recorded for an accounting period, their balances should be all transferred to Retained Earnings account, together with the dividend payment during the period, to determined the ending balance of Retained Earning account at the end of the accounting period.

    Once the closing entries has been recorded, the balance of all revenues and expenses, dividend payments accounts will be set back to zero at the start of next account period for recording revenue and expenses taken place in that period only. While Retained Earning Balance will show how much accumulated Earnings a firm retained since the start of its business.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The primary purpose of closing entries is to:Prove the equality of the debit and credit entries in the general journal. Ensure that all ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers