Which of the following accounts will not be closed to the capital account at the end of the year? a. Insurance Expense b. Fees Earned c. Utilities Expense d. Prepaid Insurance

Question

Business

Jack Sawyer

7 October, 23:47

Which of the following accounts will not be closed to the capital account at the end of the year? a. Insurance Expense b. Fees Earned c. Utilities Expense d. Prepaid Insurance

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Answers (2)

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Olive Costa · Answer 1

Fees earned

All other options are expenses, but only fees earned is about income.

Explanation:

Fees earned is a revenue based account which is feature in the revenue section of an income statement. It contains information about the amount of income accrued within a reporting period, it is the amount of money gotten from customers within a reporting period or a business year.

Malachi Potts · Answer 2

d. Prepaid Insurance

Explanation:

At the end of the accounting year temporary accounts are closed to capital account.

Temporary accounts include revenue accounts, expense accounts, gains and losses. These accounts now begin the new year with zero balances. They are used to determine profit or loss position at year end.

Permanent accounts on the other hand are not closed, but balance is carried forward to next year.

Prepaid insurance is a permanent account and is not closed at end of year.