Which of the Following Accounts Should Be Closed at the End

question 230

Multiple Choice

Which of the following accounts should be closed at the end of the fiscal year?

• A) Merchandise Inventory
• B) Accumulated Depreciation
• C) Drawing
• D) Cost of Merchandise Sold

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Definitions:

Break-Even

The point at which total costs and total revenue are equal, meaning there is no profit or loss.

Sales Dollars

The total amount of revenue generated from the sale of goods or services, measured in dollars.

Common Fixed Expenses

Fixed costs not directly attributed to any specific segment of a business, benefiting the entire organization.

Absorption Costing

An accounting method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed manufacturing overhead — in the cost of a product.