1 Which of the following accounts would be closed at the end

1. Which of the following accounts would be closed at the end of an accounting period?

a. Accounts receivable

b. Land

c. Account payable

d. None of the accounts listed would be closed at the end of an accounting period.

2.

Prior to closing the accounting records of Brand Company showed $30,000 of assets, $10,000 of liabilities, $19,500 of retained earnings, $3,000 of revenue, $2,000 of expenses and $500 of dividends. After closing the balance in the retained earnings account will be

a. $21,000.

b. $20,500.

c. $20,000.

d. $19,500.

Solution

All the asset and liability account (land, AR, AP) are permanent account and are recorded in balance sheet, and all the revenue and expense item are recorded on income statement, and are temporary account and get closed at the end of every accounting.

IN this question all are permanent account so no account will be closed at the end of accounting period.

Correct option is D.

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Revenue – expense – dividend = retained earning

3000 – 2000 – 500 = 500

500 will be transferred to the balance sheet and added to the retained earning so the balance in retained earning account will be = 19500 + 500 = 20000

Correct answer is C.

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Hope that helps.

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