Question

Which accounts should be closed at the end of the period? (Select all that apply.)

a)salary expense
b)sales
c)cash
d)dividends

Answer 1

Temporary accounts, such as revenue, expense, and dividend accounts, should be closed at the end of an accounting period. Therefore, salary expense, sales, and dividends should be closed, while the cash account, being an asset account, should not. The correct options are a b d.

Step-by-step explanation:

The accounts that should be closed at the end of an accounting period are temporary accounts. These typically include revenue, expense, and dividend accounts. Specifically, for the given options:

• Salary expense (a) - Yes, this is an expense account and should be closed.
• Sales (b) - Yes, this is a revenue account and should be closed.
• Cash (c) - No, this is an asset account and should not be closed.
• Dividends (d) - Yes, this is a distribution to shareholders and should be closed.

At the end of an accounting period, all income statement accounts, including revenues and expenses, are closed to prepare the company for the new accounting period. Dividend accounts are also closed as they are distributions of profit to shareholders and are not part of the company's retained earnings for the new period. The correct options are a b d.