Revenue accounts should begin each accounting period with zero balances?

True or false revenue and expense accounts must be closed out because their balances apply to only one accounting period?

True

Are revenue and expense accounts temporary?

The balances in all temporary accounts are transferred to the capital or the retained earnings account, leaving the temporary accounts with zero balances. This procedure is necessary to determine a periodic net income (or loss) and prepare books for the next period.

Closing the temporary accounts at the end if each accounting period?

give the revenue and expense accounts zero balance

How do you explain Real Accounts?

Asset, Liability, and Capital Accounts that appear on the balance sheet. The balances of "real" accounts are not canceled out at the end of an accounting period but are carried over to the next period. Also called permanent accounts.

What are the characteristics of final accounts?

Final accounts are closed accounts at the end of a period in accounting. Final accounts cannot be changed and represent the transactions in an accounting period.

What is a month end closing in accounting?

Month end closing of the accounts is a process of resetting the income and expenditures balances to $0 to begin the next accounting period. To to this, we DR or CR income and expenditures to the profit and loss statement, allowing for the income and expenditure account balances to be reset.

What are characteristics of final account?

Final accounts are closed accounts at the end of a period in accounting. Final accounts cannot be changed and represent the transactions in an accounting period.

What is accounting period concept?

Accounting period is the minimum time period for which comany prepare it's books of accounts.

The ending account balance of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period?

th ending account balances of permanent accounts for one fisical period?

Is there a difference between adjusting entries and correcting entries?

Adjusting entries occur completed at the end of the accounting period, but before preparing the financial statements; so in order for a company's accounting financial statements and records to be up-to-date on the accrual basis of accounting. To show an example, each day the company earns wages expense but the payroll relating to workers' wages for the last days of the month would not be entered in the accounting records until after the end of the accounting period. Also, we know that this company uses electricity each day but receives just one bill per month, perhaps on the 20th day of the month. The electricity expense for the last 10-15 days of the month must be put into the accounting records if the financial statements are going to show all of the expenses and the amounts owed for the up-to-date accounting period. There are more additional acclimating entries amounts that the company paid prior to amounts becoming expenses. For examples, the company perhaps paid its insurance premiums for a four month period prior to the start of the four month period. It is possible the company may have deferred the expense by recording the amount in the asset account Prepaid Insurance. During the accounting period some of those premiums expired (were used up) and need to appear as expense in the current accounting period and the asset balance reduced. With closing entries they are dated as of the last day of the accounting period. However they are entered into the accounts after the financial statements have been prepared. Manly closing entries contain the income statement accounts. The closing entries will set the balances of all of the revenue accounts and the expense accounts to zero. This means that the revenue and expense accounts will start the new year with zero in the accounts, thus allowing the company to easily report the new year revenues and expenses. So we see that the net amount of all of the balances from expense and revenue accounts at the end of the year will be in retained earnings (for corporations) or owner's equity (for sole proprietorships).

Describe how an accurral accounting deferent fom cash accounting?

Accrual accounting records an expense/revenue in the period the transaction occurs. Cash accounting recognizes and expense/revenue when cash is exchanged.

Who of the following accounts would be closed at the end of the accounting period?

Accounts receivable