Which of the following accounts would be closed at the end of the accounting period with a debit?

Which of the following accounts would be closed at the end of the accounting period with a debit?

a. Sales Discount

b. Sales Return and Allowances

c. Cost of Goods Sold

d. Operating Expense

e. Sales

Answer: The correct options are (a), b, c and d.

In accounting, this is referred to as: “Closing temporary accounts” In this process, the given accounts are brought to zero. The accounts stated above all the expense and contra-revenue accounts have the normal debit balance respectively in the financial statement. Likewise, to close them, they are credited and the balance is taken to Income Summary account through the process of debit entry. It also helps in ascertaining the net income and does all the adjustments the necessary on the accounts for the next period. Analysis of accumulated data revealed that Sales Discount and Sales Return and Allowances bear a Net relation to Gross Sales. Cost of Goods Sold are those expenses that are incurred during the production of the goods or services that are sold during the period so the higher the COGS, the lower the price at which it is sold. Operating expenses on the other hand are those expenses which are incurred in the course of normal operation of business be it rental cost or cost of electricity or water etc. and sale would be a revenue account which has credit balance and is closed by debiting it.