Multiple choice

Which accounts are closed at the end of the accounting period by transferring them to trading and P& L account?

  1. Temporary accounts

  2. Permanent accounts

  3. Any type of accounts

  4. None of these
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A Correct answer
Explanation

Temporary accounts, also known as nominal accounts, track revenues and expenses for a specific accounting period. At the end of the period, these accounts are closed by transferring their balances to the Trading and Profit and Loss account to determine the net result of operations.

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