Which of the Following Statements Best Describes the Purpose of Closing

question 99

Multiple Choice

Which of the following statements best describes the purpose of closing entries?

• A) To faciliate posting and taking a trial balance.
• B) To determine the amount of net income or net loss for the following period.
• C) To reduce the balances of revenue and expense accounts to zero so that they may be used to accumulate the revenues and expenses of the next period.
• D) To complete the record of various transactions that were started in a prior period.

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Definitions:

Subtraction

A mathematical operation that represents the operation of removing objects from a collection.

Pendulum Clock

A clock that keeps time by using a swinging weight, or pendulum, as its timekeeping element.

Complete Cycle

A full sequence of events that returns to the starting point or condition, often referred to in contexts like oscillations or business cycles.

Two Decimal Places

A numerical representation precise to two digits to the right of the decimal point.