Complete the following statement. The purpose of the closing process is to reset temporary (temporary/permanent) account balances to zero and to transfer the changes in all of these accounts to the Owner, captial (Capital/Summary/Withdrawal) account.

Temporary, Capital

Explanation:

The reason is that temporary accounts include income, expenses and dividends accounts. These accounts are set to zero after an accounting period and all the differences goes to retained earnings which is capital in nature. The accounts which are assets, capital and liability in nature are called permanent accounts because these accounts are not nullified at the end of the period.

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return