At the End of the Accounting Period

question 125

Multiple Choice

At the end of the accounting period:

• A)all accounts are closed.
• B)temporary accounts are closed;permanent accounts are not.
• C)permanent accounts are closed;temporary accounts are not.
• D)only accounts with a credit balance are closed.

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Definitions:

Compounding

The process where an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.

Effective Annual Rates

The interest rate on an investment or loan that considers the effects of compounding over a year.

Annual Percentage Rates

Annual Percentage Rates (APR) represent the annual interest rate charged for borrowing or earned through an investment, accounting for fees and other costs.

APR

Annual Percentage Rate, encompassing the annual rate charged for borrowing or earned through an investment, inclusive of any fees or additional costs.