Question

Opening entries are passed at the beginning of financial year to bring the assets and liabilities into the books of account.

• A. True
• B. False

Answer 1

The correct option is A True

Opening entries are passed in the beginning of the accounting year. These entries are passes to bring assets and liabilities balances if the preceding year to the current accounting year. For posting opening entries in the ledger, conventionally "To Balance b/d" or "By Balance c/d" are used. The source document for opening entries is previous accounting year's balances.

To bring forward the balances of assets and liabilities in the beginning of the accounting year, the entries are passed. Here liabilities also include equity. With the help of these entries, accounts of assets and liabilities get opened in the fresh set of books for the new accounting year.