Which of the Following Statements Is True

question 28

Multiple Choice

Which of the following statements is true?

• A)Owner's capital must be closed each accounting period.
• B)A post-closing trial balance should include only permanent accounts.
• C)The work sheet can be substituted for preparing financial statements.
• D)By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts.
• E)Closing entries are only necessary if errors have been made.

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Definitions:

Adjusting Journal Entry

A journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period, ensuring the accounts reflect true and fair values.

Fees Earned

Revenue generated from providing services, calculated over a specific period and reported on the income statement.

Payment

A payment is the transfer of money, goods, or services from one party to another as an exchange for products, services, or fulfillment of obligations.

Explanation

Clarification, detailed account, or interpretation of a concept, term, or phenomenon.