Explain the differences between permanent and temporary accounts and identify which types of accounts must be closed at the end of a company’s fiscal year.

The Closing Process
For your initial Discussion post, address the following questions/topics:
Explain the differences between permanent and temporary accounts and
identify which types of accounts must be closed at the end of a
company’s fiscal year. Additionally, recall your Week 1 Discussion in
which you brainstormed a business you would like to start. For your type
of business, identify at least three permanent and at least three
temporary accounts your business would have and explain why each account
is categorized as such. For the permanent accounts, be sure to classify
each as if the accounts where presented in a classified balance sheet.
Once closing entries have been entered in the general journal and
posted to the ledger, what is the effect on the owner’s capital (or
retained earnings) account?
Explain the purpose of a post-closing trial balance in your own
words and answer this question: Is the post-closing trial balance
mandatory as a step in the accounting cycle?
Reflect on this question: Assuming a company’s first year-end, would
financial statements be affected if the closing process were not
completed? Explain.
For your replies, comment on the differences between permanent and
temporary accounts focusing on the accounts listed in your classmates’
posts. What new insight regarding the closing process have you gained
from reading your classmates’ posts? Do you agree or disagree with your
peers’ answers to the reflection question? Fully explain your rationale
for your agreement or disagreement.
Be sure to post at least one reference in support of your explanations and conclusions.

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