{"id":209590,"date":"2025-04-29T08:04:12","date_gmt":"2025-04-29T08:04:12","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=209590"},"modified":"2025-04-29T08:04:14","modified_gmt":"2025-04-29T08:04:14","slug":"which-of-the-following-account-balances-would-not-be-closed-at-year-end-by-debiting-the-account","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/04\/29\/which-of-the-following-account-balances-would-not-be-closed-at-year-end-by-debiting-the-account\/","title":{"rendered":"Which of the following account balances would not be closed at year-end by debiting the account"},"content":{"rendered":"\n<p>Which of the following account balances would not be closed at year-end by debiting the account? <\/p>\n\n\n\n<p>A. Interest revenue <\/p>\n\n\n\n<p>B. Gain on sale of building <\/p>\n\n\n\n<p>C. Sales revenues <\/p>\n\n\n\n<p>D. Unearned revenues<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Correct Answer: D. Unearned revenues<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>At the end of an accounting period, temporary (or nominal) accounts are closed to prepare the accounting records for the next period. This process involves transferring the balances of temporary accounts to permanent (or real) accounts, usually through the <strong>Income Summary<\/strong> and ultimately into <strong>Retained Earnings<\/strong>.<\/p>\n\n\n\n<p><strong>Temporary accounts<\/strong> include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Revenues (e.g., Interest Revenue, Sales Revenues)<\/li>\n\n\n\n<li>Gains (e.g., Gain on Sale of Building)<\/li>\n\n\n\n<li>Expenses<\/li>\n\n\n\n<li>Losses<\/li>\n\n\n\n<li>Dividends (in corporations)<\/li>\n<\/ul>\n\n\n\n<p>These accounts accumulate balances over a single accounting period and must be reset to zero at the end of the period through closing entries.<\/p>\n\n\n\n<p>Let\u2019s evaluate each option:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A. Interest revenue<\/strong> \u2013 This is a revenue account and is therefore temporary. It would be closed at year-end by debiting Interest Revenue to reduce its balance to zero and crediting the Income Summary.<\/li>\n\n\n\n<li><strong>B. Gain on sale of building<\/strong> \u2013 This is considered a gain, which is a form of revenue. Gains are temporary accounts and are closed to Income Summary at year-end. The account would be debited in the closing entry.<\/li>\n\n\n\n<li><strong>C. Sales revenues<\/strong> \u2013 Like other revenue accounts, Sales Revenues are temporary and must be closed. It would be debited to eliminate the balance, transferring it to the Income Summary.<\/li>\n\n\n\n<li><strong>D. Unearned revenues<\/strong> \u2013 This is a <strong>liability account<\/strong> and not a revenue account. It represents cash received before services are performed or goods are delivered. Since it is a <strong>permanent account<\/strong>, it is <strong>not closed<\/strong> at the end of the accounting period. Its balance is carried forward to the next period.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion:<\/h3>\n\n\n\n<p>Unearned Revenues is a <strong>permanent liability account<\/strong> and is <strong>not closed<\/strong> at year-end, making <strong>D the correct answer<\/strong>. All other options are temporary accounts and would be closed by <strong>debiting<\/strong> the account.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Which of the following account balances would not be closed at year-end by debiting the account? A. Interest revenue B. Gain on sale of building C. Sales revenues D. Unearned revenues The correct answer and explanation is : Correct Answer: D. Unearned revenues Explanation: At the end of an accounting period, temporary (or nominal) accounts [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-209590","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/209590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=209590"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/209590\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=209590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=209590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=209590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}