Closing Entries

question 19

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.

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Definitions:

Synergistic Benefits

Advantages gained from a merger or acquisition that allow for a performance greater than the sum of the two companies operating individually.

Merger

A merger involves the combination of two or more companies into one, where they pool their resources and operate as a single legal entity.

Debt Level

Represents the total amount of money owed by an individual, corporation, or other entity to lenders, which can impact financial health and creditworthiness.

Tax Gains

The financial gains attained from investments that are subject to taxation.