The Closing Process Is a Step in the Accounting Cycle

question 120

True/False

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

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Definitions:

Debt-Equity Ratio

The debt-equity ratio is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Pre-Tax Cost

The expense or cost that a company incurs which is calculated before any taxes are applied.

Return on Assets

A financial metric that indicates how profitable a company is relative to its total assets, demonstrating how efficient a company is at using its assets to generate earnings.