| Accounts | Explanation |
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What are real accounts?
Real accounts are accounts whose balances continue into the next fiscal period.
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Why are closing entries important?
Businesses want to know if they are making money or not. They want to compare sales and net income from one year to the next.
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Name all types of real accounts.
Assets, Liabilities and Capital
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What are nominal accounts?
Nominal accounts are balances that do not continue into the next fiscal period
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Name all the nominal accounts.
Expenses, Revenue and Drawings
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What is the new nominal account that us used to summarize revenues and expenses?
Income Summary Account
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