What accounts are considered temporary accounts in the accounting cycle?

Temporary accounts are those accounts that are closed at the end of an accounting period, and they typically include revenues, expenses, and dividends. The main purpose of temporary accounts is to track financial performance over a specific period of time rather than accumulate the data indefinitely.

Revenues represent the inflows from various business activities, reflecting the income earned during the period, while expenses represent the outflows or costs incurred in generating those revenues. At the end of the accounting period, the balances in these accounts are transferred to permanent equity accounts, particularly retained earnings, which summarize the overall financial performance. By closing temporary accounts, businesses can reset these balances to zero for the new accounting period, enabling clearer tracking and reporting of financial results.

The other options listed do not match the definition of temporary accounts. Assets and liabilities, for example, are considered permanent accounts since their balances carry forward into future periods. Similarly, investments and retained earnings refer to ongoing holdings and accumulated net income, which also result in balances that are not reset at period-end.