An Important Purpose Of Closing Entries Is To (True / False & MCQ)

An important purpose / objective of Closing Entries is to set Nominal Account or Temporary Account balances to zero out in order to start or begin the next accounting period. It is the correct choice or option of this multiple choice question (mcq).

So, an important purpose of closing entries is to set Permanent Account balances to zero is not true i.e, answer of this True & False question is "False", as permanent account balances are transferred to the next year’s financial statements. These accounts are only closed when the business is closed down i.e., it goes into liquidation process or winding up process as the business suffered heavy losses during the previous accounting periods.