The heating and radiative cooling of steady-state viscous accretion disks in close binary systems are studied. It is shown that the temperatures of the outer regions of disks do not fall below approx.6000 K over a wide range of conditions. Depending upon the mass accretion rate, the outer parts of disks in cataclysmic variables are optically thin in the optical continuum, and radiate a line spectrum which is superposed upon the thermal continuum emitted by the inner disk. The Balmer lines and Ca II H and K emission which are observed in dwarf novae at quiescence can be explained by the emission from the optically thin outer regions of the disks; however, the HeI and H II lines must be produced by a different mechanism. This theory predicts that the peak fluxes of the Balmer lines in cataclysmic variables should fall on a Planck curve of temperature approx.7000 K.