Which of the following is true concerning temporary and permanent accounts?A. Cash is a temporary accountB. Permanent accounts represent activity over the entire life of the companyC. Permanent accounts must be closed at the end of every reporting periodD. Temporary accounts represent activity over the previous three years

Option B. Permanent accounts represent activity over the entire life of the company is TRUE,

Explanation:

Briefly, temporaty accounts are closed at the end of the year, their balance is zeroed every year by transferring the balance to another account.

Then, option D. Temporary accounts represent activity over the previous three years is FALSE.

In contrast, the balance of permanent accounts are carried forward to the following year.

Then, option B. Permanent accounts represent activity over the entire life of the company is TRUE, and option C. Permanent accounts must be closed at the end of every reporting period is FALSE.

Most of the balance sheet accounts are permanent accounts. Some typical examples are Cash, Receivables, Inventory, Equipment, Payables, Capital,  Retained Earnings.

Then, the option A. Cash is a temporary account, is FALSE.

The income statement accounts are temporary accounts: Revenues, Expenses, Gains, Losses.

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

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