Assets, Liabilities and Owner's Equity are permanent accounts and are never closed.

• A. False
• B. True
• C. Not always
• D. Never

Answer: (B)

In accounting, accounts are split into permanent and temporary groups. Permanent accounts—assets, liabilities, and owner's equity—are not closed at the end of a period; their balances carry forward into the next period. What gets closed are the temporary accounts—revenues, expenses, and withdrawals/drawings—which are reset to zero and their net effect is transferred to equity (retained earnings or capital). Because permanent accounts never get reset, the statement is true: assets, liabilities, and owner's equity are permanent accounts and are never closed. Their balances reflect the ongoing financial position and change only through transactions, not through a closing process.