Closing Entries

question 44

Multiple Choice

Closing entries

• A) are prepared before the financial statements.
• B) reduce the number of permanent accounts.
• C) cause the revenue and expense accounts to have zero balances.
• D) summarize the activity in every account.

Calculate and interpret inventory turnover ratios and days' sales in inventory.

Recognize the effects of inventory misstatements on the balance sheet, income statement, and taxation.

Calculate inventory turnover and understand its implications on business operations.

Determine the effects of errors in inventory recording on financial statements.

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Definitions:

Reluctant

Feeling or showing hesitation, unwillingness, or disinclination.

Withholding

The action of keeping back, suppressing, or refraining from disclosing information.

Invulnerable

The state of being incapable of being wounded, hurt, or damaged, physically or emotionally.

Vulnerable

The state of being open to harm, attack, or emotional hurt, often due to a lack of protection or resilience.