How do temporary accounts differ from permanent accounts?

• A. Temporary accounts are only used for tax purposes, while permanent accounts are used for financial reporting.
• B. Temporary accounts are closed at the end of each period, while permanent accounts carry their balances forward.
• C. Temporary accounts are used for internal reporting, while permanent accounts are used for external reporting.
• D. Temporary accounts are part of the balance sheet, while permanent accounts are part of the income statement.

Answer: (B)