Question

Match the following:

• A. Temporary Account
• B. Permanent Account
• C. Book of Prime Entry
• D. Group of Accounts

Answer 1

• All the asset accounts are permanent accounts whose balances can be carried forward to next period.
• All the revenue accounts are temporary accounts whose balances are not carried forward instead closed by transferring to profit and loss account.
• Journal is called a book of prime entry as all the transactions are recorded for the first time in books of account.
• Group of accounts is called a ledger. All the journal entries are posted to the respective ledger accounts.