Question

Which of the following is a permanent account you do not close?

1) Depreciation Expense
2) Service Revenue
3) Owner's Withdrawals
4) Accumulated Depreciation

Answer 1

The permanent account that is not closed at the end of the accounting period is Accumulated Depreciation. It carries its balance over to the next accounting period and accumulates the total depreciation of an asset over its useful life.

Step-by-step explanation:

The account that is a permanent account and is not closed at the end of the accounting period is Accumulated Depreciation. Permanent accounts, also known as real accounts, include all balance sheet accounts. These accounts carry their ending balance into the next accounting period. In contrast, temporary accounts, such as Depreciation Expense, Service Revenue, and Owner's Withdrawals, are zeroed out by transferring their balances to a permanent equity account, typically Retained Earnings or a similar account for non-corporate entities.

Accumulated Depreciation is a contra-asset account shown on the balance sheet that accumulates the total depreciation of an asset over its useful life. It is not closed at the end of the accounting period because it reflects the cumulative amount of depreciation that has been taken against an asset since its acquisition.