What are the closing entries?

Closing entries are accounting journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts. They typically involve closing revenue and expense accounts to the income summary, and then transferring the balance of the income summary to retained earnings. This process resets temporary accounts to zero for the next period, ensuring that financial statements reflect only the current period's results. Closing entries are essential for accurate financial reporting and maintaining the integrity of the accounting cycle.