|Purpose:||(L.O. 2) This exercise will give you practice in identifying those accounts which are closed at the end of the accounting period and those accounts which are not closed.|
Indicate whether the following accounts would or would not be closed at the end of the accounting period by placing an “X” in the appropriate column.
TIP: Remember the general rule: All nominal accounts (revenues, expenses, and dividends) are closed and all real accounts (assets, liabilities, common stock, and retained earnings) are not closed. Therefore to determine if an account will be closed or not closed, analyze the classification of the account.
TIP: Nine of the following are nominal or temporary accounts; eleven are real or permanent accounts.