Closing entries are generally passed:
Correct answer: B. At the time of closing the accounts
- A. At the time of opening new books of account
- B. At the time of closing the accounts
- C. During the course of accounting period any time
- D. After certification of accounts
Explanation
Closing entries transfer revenue and expense balances to the Profit and Loss Account and ultimately to capital or retained earnings. They are passed at the end of the accounting period when the accounts are closed.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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