The Entry to Close the Expense Account(s) Was Entered in Reverse

question 59

Multiple Choice

The entry to close the expense account(s) was entered in reverse - Income Summary was credited and the expense account(s) was/were debited. This error would cause

• A) assets to be overstated.
• B) liabilities to be overstated.
• C) Capital account to be understated.
• D) Capital account to be overstated.

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Definitions:

Short Run

A period in economic analysis during which some factors of production are fixed, affecting production and cost decisions.

Average Variable Costs

The total variable costs (costs that vary with the level of output) divided by the quantity of output produced.

Average Costs

The total cost of production divided by the number of goods produced, representing the per-unit cost of production.

Shut-Down

Shut-down refers to the temporary or permanent cessation of operations, usually in the context of businesses or machinery.