Net Income of a Corporation Should Be Closed to Retained

question 175

True/False

Net income of a corporation should be closed to retained earnings and net losses should be closed to paid-in capital accounts.

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Definitions:

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts in order to check the mathematical accuracy of the accounts' balances.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments have been made for errors, accruals, and deferrals in the accounting period.

Operating Activities

Activities that relate to the primary business operations of a company, including production, sales, and delivery of the company's products and services.

Investing Activities

Transactions involving the purchase or sale of long-term assets and investments not included in cash equivalents.