Are revenue and expense accounts permanent?

Question

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Sutera 0 Comments

Let’s say that you made some transactions during the year so the revenue and the expenses balance are not nil. Are they permanent? Do you carry them forward?

2 Answers

score 0 · Answer 1 · 2012-12-02T22:19:13+00:00

No they are not permanent accounts. The income statement accounts are closed at the end of the financial year and the final balance (effectively the final balance) is transferred to the balance sheet and included in the retained earnings. The opening balance for revenues and expenses should be zero for each financial year.

score 0 · Answer 2 · 2013-05-07T23:24:31+00:00

No, revenue and expense accounts are eliminated at the year end and the whole profit and loss account is transferred to the retained earnings. The next year, revenue and expenses start from nil.