Which of the Following Is True Concerning Temporary and Permanent

question 25

Multiple Choice

Which of the following is true concerning temporary and permanent accounts?

• A)Cash is a temporary account.
• B)Permanent accounts represent activity over the entire life of the company.
• C)Permanent accounts must be closed at the end of every reporting period.
• D)Temporary accounts represent activity over the previous three years.

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Definitions:

Supplies Account

An account in the general ledger that records the amount spent on supplies that are used in the operation of a business.

General Journal

A ledger where all financial transactions of a business are initially recorded using double-entry bookkeeping.

Purchases Journal

A financial journal used to record all purchases of goods and services on credit.

Return Supplies

Returned goods or materials that were previously purchased, which can reduce the payable amount or be exchanged for credit.