In Preparing Closing Entries

question 116

Multiple Choice

In preparing closing entries

• A) every revenue account will be credited.
• B) every expense account will be credited.
• C) the owner's capital account will be debited if there is profit for the period.
• D) the owner's drawings account will be debited.

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Definitions:

Work in Process

Refers to the goods that are in various stages of production within a manufacturing process but have not yet been completed.

Finished Goods

Units of product that have been completed but not yet sold to customers.

Ending Balance

The amount of money in an account at the end of a financial period, after all additions and subtractions have been accounted for.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard hourly labor rate.