Q: Does accrued expenses and revenue need to be closed at the end of the accounting period?
A: First let's make sure we understand what accrued expenses and revenue is.
Accrued expenses are expenses that are owing. Actually "accrued" basically means not yet paid but owing. So accrued expenses is actually a liability. For example, accrued rent. Or accrued salaries and wages.
Liabilities are permanent accounts, which means they are never closed off (cancelled out and started from zero) at the end of the accounting period.
Accrued expenses (a liability) is not closed off but rather simply included in the total of one's creditors account.
Revenue, on the other hand, is income. And income is a temporary account, meaning it needs to be closed off at the end of the period. The closing balance of revenue is cancelled out and transferred to another account to work out the profit for the year.
FYI I don't actually go over closing entries and adjusting entries in any detail on this site. This subject is only dealt with in my series of basic accounting books.
Hope that helps.
Best, Michael Celender
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