Closing Entries Deal Primarily with the Balances of Permanent Accounts

question 123

True/False

Closing entries deal primarily with the balances of permanent accounts.

---

Definitions:

Financial Report

A formal record of the financial activities and position of a business, person, or other entity, often audited and presented in a structured manner.

Balance Sheet

A financial statement that shows what the company owes, what it owns, including the shareholder’s stake, at a particular point in time.

Cash Conversion Cycle

A metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Production and Sales Process

The combined sequence of operations involved in manufacturing goods and selling them to customers.