Closing adds entries while preserving the original journal and ledger records.
The next period needs opening asset, liability, and equity balances, but separate measures of its own revenue and expenses.
Retained Earnings is an equity account, not a separate cash balance.
Closing debits transfer the revenue balance. They are not refunds or reductions of the year's earned revenue.
Answer: B
Permanent positions and updated Retained Earnings carry into the next period. Revenue, expense, and distribution accounts begin the next period at zero, but their prior entries and the closing transfers remain traceable. Closing lines must be identified separately from operating transactions. Choice B is correct.