A temporary account is an account that is used to hold funds temporarily during an accounting period and is cleared at the end of the period to distribute those funds to appropriate permanent accounts, also known as “real accounts.” Companies of various sizes use temporary accounts to hold money for numerous different purposes. They are administered by accounting staff like other accounts and records are kept to document account activity so that taxes and other filings can be filled out appropriately.
Source: http://www.wisegeek.com/what-is-a-temporary-account.htm
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