Closing Entries Are Required

question 175

Multiple Choice

Closing entries are required:

• A)If management has decided to cease operating the business.
• B)Only if the company adheres to the accrual method of accounting.
• C)If a company's bookkeeper does not choose to prepare reversing entries.
• D)So that Revenue,expense,and dividends accounts must begin each period with zero balances.
• E)In order to satisfy the Internal Revenue Service guidelines.

---

Definitions:

Unit Contribution Margin

Unit contribution margin is the difference between the selling price of a product and the variable costs associated with its production and sale.

Profit

The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide the goods or services.

Contribution Margin Ratio

A measure that calculates the portion of sales revenue that exceeds variable costs, expressed as a percentage.

Sales Dollar

The total revenue generated from selling goods or services, measured in dollars.