Which of the following types of accounts must be closed at the end of the period?

The accounting cycle concludes with the closing of temporary (or nominal) accounts. These accounts, which include all income statement accounts (revenues and expenses) as well as owner's drawings or dividends, track financial activity over a single accounting period. Their balances are transferred to a permanent equity account (e.g., Retained Earnings) to reset them to zero for the start of the next period. This process ensures that income is only measured for the current period.

B: Balance sheet accounts are permanent accounts; their balances are not closed but are carried forward to the next period. C: Permanent accounts, by definition, are not closed at the end of an accounting period. D: Real accounts is another term for permanent (balance sheet) accounts, which are not closed.

1. Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2019). Financial Accounting (11th ed.). Wiley. Chapter 4, "Completing the Accounting Cycle," details the closing process specifically for temporary accounts like revenues and expenses.

2. OpenStax. (2019). Principles of Accounting, Volume 1: Financial Accounting. Rice University. Chapter 4, Section 4.4, "Prepare Closing Entries and a Post-Closing Trial Balance," explicitly states that temporary accounts are closed to Retained Earnings.

3. Spiceland, J. D., Nelson, M. W., & Thomas, W. B. (2020). Intermediate Accounting (10th ed.). McGraw-Hill Education. Chapter 3, "The Accounting Information System," distinguishes between real (permanent) accounts that are not closed and nominal (temporary) accounts that are.