Which of These Accounts Should Be Closed to the Profit

question 15

Multiple Choice

Which of these accounts should be closed to the profit or loss summary account at the end of the financial period?

• A) Insurance payable
• B) Prepaid insurance
• C) Accumulated depreciation
• D) Depreciation

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Definitions:

Smoothing Constant

A parameter used in exponential smoothing techniques that determines the weight given to the most recent observation in forecasting.

Exponential Smoothing

A forecasting technique that applies weighted averages of past observations, giving more weight to more recent observations to smooth data.

Liquor Sales

The commercial activity of selling alcoholic beverages, which can include processes such as licensing, distribution, and retailing.

Smoothing Constant

A parameter used in exponential smoothing techniques to apply different weights to past observations in forecasting.