Closing Entries

question 95

Multiple Choice

Closing entries

• A)are prepared before the financial statements.
• B)reduce the number of permanent accounts.
• C)cause the revenue and expense accounts to have zero balances.
• D)summarize the activity in every account.

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Definitions:

Total Manufacturing Costs

The cumulative cost of materials, labor, and overhead expended on the production of goods.

Gross Profit

The difference between sales revenue and the cost of goods sold, representing the profit from buying and selling goods before administrative and other expenses.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a given period, including materials, labor, and overhead expenses.

Net Sales

The amount of sales revenue after deducting sales returns, allowances, and discounts.