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Which of the following is a (are) permanent account(s)?
Multiple Choice
A, All income statement accounts
B, All balance sheet accounts and the Dividends account
C, The Retained Eamings account
D, The Dividend account
♦ Relevant knowledge
They are real accounts that exist within the balance sheets. They are not closed at the close of the accounting year , but they are carried forward to the next year. All assets, liabilities , and equity are accounts that remain in existence for the duration of the year.
Permanent accounts (s) is/are those that are not closed at year’s end. Permanent accounts can refer to assets, liabilities, and capital accounts.
All income accounts and Dividend accounts will be closed at the close of the year. These accounts are temporary, not permanent.
The 100% correct answer is “C”. Retained earnings account refers to capital accounts and is therefore permanent.
All Balance sheet accounts can be permanent, but there is a high probability that the correct choice is Retained earnings.