Question

What is the main purpose of closing entries for revenues and expenses into Profit and Loss Summary? a. To determine the profit for period. b. To transfer the journalised entries to relevant ledger account. c. To check the accuracy of journal entries. d. To provide information of business ability to repay for the debt.

Answer 1

A

Explanation:

Revenues and expenses are closed every year so that the profit or loss can be determined for the yearly period.