Which of the following represents permanent accounts?

• A. Revenue and Expense
• B. Sales Revenue and Service Revenue
• C. Assets, Liabilities, and Owner's Equity
• D. Drawings and Dividends

Answer: (C)

Permanent accounts are those that keep their balances from one accounting period to the next. They form the balance sheet and include assets, liabilities, and owners’ equity, continuing to carry their balances forward rather than being closed at period end. This persistence distinguishes them from other accounts that reset to zero each period.

Revenues and expenses are closed at the end of the period to reflect performance, so they do not carry forward as individual balances. Drawings and dividends are distributions that affect owners’ equity but are also cleared out at period end, not carried as permanent balances. Because assets, liabilities, and owners’ equity persist and form the ongoing financial position of the business, they are the permanent accounts.