Constraints Essentially State That Input = Output and Ensure That

question 43

Multiple Choice

constraints essentially state that input = output and ensure that the flow of material or money is accounted for at locations or between time periods.

• A) Requirements
• B) Proportional relationships
• C) Balance
• D) Limitations

---

Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Post-Closing Trial Balance

A listing of all balance sheet accounts with balances after closing entries are made, used to verify the equality of debits and credits.

Current Ratio

A financial metric comparing a company's current assets to its current liabilities to assess liquidity.

Short-Term Solvency

A company's ability to meet its short-term obligations, often assessed using liquidity ratios.