It Is Not Necessary to Post the Closing Entries to the Ledger

question 116

True/False

It is not necessary to post the closing entries to the ledger accounts because new revenue and expense accounts will be opened in the subsequent accounting period.

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Definitions:

Solvency Analysis

An evaluation of a company's ability to meet its long-term debts and financial obligations.

Dimensional Analysis

A mathematical technique used to convert one set of units to another, maintaining the same physical quantity.

Operating Activity

Activities that constitute the primary or core business functions of an entity, including production, distribution, and sales, affecting the operational cash flows.