Final answer:
Permanent accounts, also known as real accounts, include asset, liability, and equity accounts and are not closed at the end of an accounting period. Temporary accounts include revenue, expenses, and dividends, and are closed at the end of an accounting period, with their balances resetting to zero.
Step-by-step explanation:
In response to which statements are true regarding permanent and temporary accounts, here are the answers:
- A) Permanent accounts are also known as real accounts: This is true. Permanent accounts consist of asset, liability, and equity accounts. They are not closed at the end of the accounting period and their balances are carried forward to the next period.
- B) Temporary accounts include assets, liabilities, and equity: This is false. Temporary accounts (also known as nominal accounts) include items like revenue, expenses, and dividends. They are closed at the end of the accounting period and their balances are transferred to the retained earnings account, which is a part of equity.
- C) Permanent accounts are closed at the end of the accounting period: This is false. Permanent accounts remain open and are not closed at the end of the accounting period. Their balances carry over into the next accounting period.
- D) Temporary accounts include revenue, expenses, and dividends: This is true. These accounts are indeed temporary accounts, which are closed at the end of the accounting period. Their balances are reset to zero, with the net of these accounts going to update the retained earnings account.