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What Is a Closing Entry and How to Record One

By Benjamin Locke – Updated May 20, 2025 at 2:35PM | Fact-checked by Frank Bass

Key Points

  • Closing entries transfer revenue and expense balances to the retained earnings account.
  • This process resets the temporary account balances to zero for the new accounting period.
  • Recording closing entries ensures accurate financial reporting and aids in performance analysis.
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