what is a revenue clearing account
Temporary accounts, such as revenue and expense accounts, are used to measure flow that occurs over time; they are closed at the end of the accounting cycle. Closing an account means to create an entry that reduces its value to zero. The process of closing all the temporary accounts is known as clearing the accounting year. 1  1. Close the revenue accounts to the clearing account. 2  2. Close the expense accounts to the clearing account. 3  3. Verify the clearing account against the income statement. 4  4. Close the clearing account to retained earnings. Revenue and expense flows result in an increase (profit) or decrease (loss) in owners' equity. At the end of the accounting cycle, the profit or loss of a company is moved to the retained earnings account.