Question

Which of the following accounts will not be closed at the end of the accounting cycle?

1) Nominal accounts
2) Temporary accounts
3) Real accounts
4) Income Summary

Answer 1

Real accounts will not be closed at the end of the accounting cycle because their balances are carried forward to the next period, unlike Nominal, Temporary, and Income Summary accounts which are closed. The correct option is 3)

Step-by-step explanation:

The account that will not be closed at the end of the accounting cycle is Real accounts. Real accounts, also known as permanent accounts, consist of balance sheet accounts such as assets, liabilities, and equity. These accounts are not closed because their balances are carried forward to the next accounting period. In contrast, Nominal accounts, Temporary accounts, and the Income Summary account are all closed at the end of an accounting period. Nominal and temporary accounts include revenue, expense, and dividend accounts, which are reset to zero at the end of the period after their balances have been transferred to permanent equity accounts to reflect the income or loss for the period.