The answer is the last one (d): to set the temporary accounts to zero.
Explanation for each option:
a.) To set the permanent accounts to open - This is incorrect. Permanent accounts (such as assets, liabilities, and equity accounts) are not closed at the end of the accounting period; they carry their balances forward to the next period.
b.) To set the temporary accounts to open - This is incorrect. Temporary accounts (such as revenues, expenses, and dividends) are not set to open; they are closed at the end of the accounting period.
c.) To set the permanent accounts to zero - This is incorrect. Permanent accounts are not set to zero at the end of the accounting period; their balances are carried forward.
d.) To set the temporary accounts to zero - This is correct. Temporary accounts are closed at the end of the accounting period to reset their balances to zero, ensuring that revenues and expenses are recorded for the new period without carrying over any balances from the previous period.
Summary:
Merchandising accounts, which are temporary accounts, are closed to set their balances to zero at the end of the accounting period. This process ensures that the financial performance of the new period is not affected by the previous period's transactions.
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