The purpose of closing entries is to:
1. update the retained earnings account on a daily basis.
2. update a periodic inventory account for credit sales.
3. reduce all temporary accounts to zero.
4. apportion prepaid expenses and unearned revenues to bring the accounts up to date.

The closing entry is used to reset the temporary account balances to zero in the general ledger, which is how a company's financial data is kept track of. Temporary accounts are used to track accounting activity over a specific time frame.

Why do closing entries for retained earnings need to be made?

Closing entries are used to move funds from temporary to permanent accounts at the end of an accounting period. Due to the consolidation of your accounts brought on by these journal entries, you will be able to determine your retained earnings, or the amount remaining after expenses and dividends have been paid.

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The purpose of closing entries is to: 1. update the retained earnings account on a daily basis. 2. update a periodic inventory account for credit sales. 3. reduce all temporary accounts to zero. 4. apportion prepaid expenses and unearned revenues to bring the accounts up to date.

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What purpose serve the final entries?

Why do closing entries for retained earnings need to be made?

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The purpose of closing entries is to:
1. update the retained earnings account on a daily basis.
2. update a periodic inventory account for credit sales.
3. reduce all temporary accounts to zero.
4. apportion prepaid expenses and unearned revenues to bring the accounts up to date.