In which scenario do temporary accounts typically close at the end of a fiscal period?

Temporary accounts, which include revenues, expenses, and dividends, are designed to track financial activity over a specific period. At the end of the fiscal period, these accounts are closed to prepare for the next period's activities. This closing process involves transferring their balances to the owner’s capital account, which reflects the cumulative effect of these accounts on the owner's equity.

By closing these temporary accounts and transferring their balances, you ensure that the income and expenses from one period do not carry over into the next period, allowing for a clean slate each accounting cycle. This aids in accurately reporting the financial performance of each period, making it easier to assess profitability and manage financial statements effectively.

Other choices may reflect misunderstandings about the purpose of temporary accounts. For instance, the generation of revenue or showing a loss doesn't dictate the closing process itself; instead, it’s the end of the fiscal period that serves as the trigger. Additionally, closing accounts doesn't occur at the beginning of a new accounting period, as it is the culmination of activities from the previous period that leads to the closure.