What Is the Correct Order for the Steps in the Closing

question 47

Multiple Choice

What is the correct order for the steps in the closing process?
I Transfer the profit or loss to the owner's capital account
II Balance the owner's capital account
III Close the drawings account to the owner's capital account
IV Close the income and expense accounts to the profit or loss summary account

• A) III, IV, II, I
• B) I, II, III, IV
• C) IV, III, I, II
• D) IV, III, II, I

---

Definitions:

Depreciable Assets

Long-term assets whose cost is gradually allocated over their useful life, reflecting a decrease in their value.

Exchange Rates

The price of one type of currency when exchanged for another.

Statement Of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specific period, factoring in net income and dividends paid to shareholders.