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:

Innovation

The process and outcome of creating something new or improved, including products, services, processes, or business models, that adds value.

Marginal Cost

The expense for creating a supplementary unit of a product or service.

Market Interest Rate

The prevailing rate at which borrowers are willing to borrow money and lenders are willing to lend in the financial market.

Needed Financing

The amount of money required to fund a project, venture, or cover operational expenses not met by current revenues.