Closing Entries Are an Optional Part of the Accounting Cycle

question 6

True/False

Closing entries are an optional part of the accounting cycle.

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Definitions:

Fair-value Hedge

A strategy used in accounting to mitigate the risk of changes in the fair value of an asset, liability, or firm commitment through derivative contracts.

Cash-flow Hedge

A hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with an asset or liability or a forecasted transaction.

Purchase Order

An official document issued by a buyer committing to pay the seller for the sale of specific products or services.

Fair-value Hedge

A hedge of the exposure to changes in the fair value of an asset or liability or an unidentified firm commitment that could affect profit or loss.