When Closing Entries Are Made

question 85

Multiple Choice

When closing entries are made:

• A)All ledger accounts are closed to start the new accounting period.
• B)All temporary accounts are closed but permanent accounts are not closed.
• C)All real accounts are closed but nominal accounts are not closed.
• D)All permanent accounts are closed but nominal accounts are not closed.
• E)All balance sheet accounts are closed.

---

Definitions:

Entrepreneur's Forgone Interest

The potential income an entrepreneur sacrifices by investing resources in their own business rather than applying them elsewhere.

Marginal Product

The additional output resulting from the use of one more unit of a factor of production, holding other factors constant.

Marginal Cost

Refers to the increase in total cost that arises from producing one additional unit of a good or service.

Short-Run Cost Curves

Graphical representations that show how a firm's costs vary with output level in the short term, where at least one factor of production is fixed.