An Error Has Occurred in the Closing Entry Process If

question 92

Multiple Choice

An error has occurred in the closing entry process if

• A) revenue and expense accounts have zero balances.
• B) the retained earnings account is credited for the amount of net income.
• C) the dividends account is closed to the retained earnings account.
• D) the statement of financial position accounts have zero balances.

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Definitions:

Residual Income

The amount of income that an individual or company retains after accounting for all costs and expenses.

Producer Price Index

An economic indicator that measures the average changes in prices received by domestic producers for their output.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.