What Are Temporary Accounts In Accounting

Temporary Accounts are related to Revenues And Expenses Accounts which are closed at the end of accounting period. Such Types of Accounts have no balances at the end of accounting period and transferred to Income Statement or Profit And Loss Accounts. Examples of these accounts are Direct and Indirect Expenses & Revenues such as Sales, Purchases, Advertisements, Salaries, Administrative Expenses, etc.

Other Examples include Income Summary Statement that is prepared to close expenses and revenues accounts and finally this statement is also closed to Income Statement.

You Can Also Study, “What Are Permanent Accounts In Accounting”

Adjusted Trial Balance is prepared to adjust the amounts of temporary accounts according to Accrual Basis of Accounting.