Closing Entries Are Made

question 77

Multiple Choice

Closing entries are made

• A) in order to terminate the business as an operating entity.
• B) so that all assets, liabilities, and equity accounts will have zero balances when the next accounting period starts.
• C) in order to transfer net income (or loss) and dividends to Retained Earnings.
• D) so that financial statements can be prepared.

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Definitions:

Duty Of Diligence

A legal obligation requiring a person to exercise reasonable care and attention in their actions or duties.

Breach Of Duty

Failure to meet the responsibilities or uphold the standards of care legally owed by one party to another.

Revoke The Authority

The act of formally withdrawing or cancelling a previously granted power or legal right, usually by the entity that granted it.

Principal May

An ambiguous term that could refer to the permissive actions or rights of a principal in legal, financial, or educational contexts; however, without more context, a specific definition cannot be provided. Likely a misinterpretation or incomplete term, hence treated as NO.