The purpose of closing entries is to transfer:

A) Accounts Receivable to Retained Earnings when an account is fully paid.

B) Balances in temporary accounts to a permanent account.

C) Inventory to Cost of Goods Sold when merchandise is sold.

D) Assets and liabilities when operations are discontinued.

Answer: B

Permanent accounts would not include:

A) Interest Expense.

B) Salaries Payable.

C) Prepaid Rent.

D) Deferred Revenues.

Answer: A

Permanent accounts would not include:

A) Accounts Payable.

B) Office Supplies.

C) Utilities Expense.

D) Common Stock.

Answer: C