Multiple choice

All assets, liabilities and capital accounts are _____________ accounts whereas all the expenses and revenue accounts are ______________accounts.

  1. permanent, permanent

  2. temporary, permanent

  3. temporary, temporary

  4. permanent, temporary

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Permanent accounts (assets, liabilities, and capital) appear on the balance sheet and carry their balances forward into the next period. Temporary accounts (revenues and expenses) are closed at the end of each period to start fresh in the next.

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