Question

Which of the following accounts would not be included in the closing process at year-end?a) Rent expense.b) Additional paid-in capital.c) Sales revenue.d) Cost of goods sold.

Answer 1

Answer:

b) Additional paid-in capital.

Explanation:

Closing process in accounting is a period end activities which involves

the movement or transfer of temporary accounts to permanent accounts.

Temporary accounts are all income statement accounts like sales account, rent account, depreciation expense account, telephone expense account e.t.c.

This exercise is to prepare temporary accounts for the next period.  since temporary accounts are measured as at period end, the transaction of a period must not be allowed to mix with another, hence the need to always close or bring to zero all temporary accounts.

In the question, all are income accounts except additional paid-in capital