Closing Entries Are Done Monthly for All Companies

question 41

True/False

Closing entries are done monthly for all companies.

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Definitions:

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced or purchased items are sold first, used for cost of goods sold calculation.

Pretax Income

The amount of income earned by a business before taxes have been deducted.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.

Inventory Error

Mistakes in counting or valuing inventory that can result in incorrect financial statements.