Nominal accounts to zero balance.Select one:a.Accrued Incomeb.Closing entriesc.Prepaid Expensesd.Prepaid Expenses
Question
Nominal accounts to zero balance.Select one:a.Accrued Incomeb.Closing entriesc.Prepaid Expensesd.Prepaid Expenses
Solution
The correct answer is b. Closing entries.
Closing entries are made at the end of an accounting period to return the balance in all nominal accounts to zero. This is done to prepare the accounts for the next accounting period. Nominal accounts include all income statement accounts (revenues, expenses, gains, losses) and also the drawing account of a sole proprietorship or the dividends account of a corporation. These accounts are "closed" or reset to zero at the
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