Which of the Following Is a True Statement About Closing

question 24

Multiple Choice

Which of the following is a true statement about closing the books of a corporation?

• A) Expenses are closed to the Expense Summary account.
• B) Only revenues are closed to the Income Summary account.
• C) Revenues and expenses are closed to the Income Summary account.
• D) Revenues, expenses, and the dividends account are closed to the Income Summary account.

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Definitions:

Equity Method

An accounting technique used by companies to assess the profits earned by their investments in other companies, reflecting the share of the profits or losses in their own financial statements.

Common Shares

Equity securities that represent ownership in a company, entitling holders to vote at shareholder meetings and receive dividends.

Investment

The allocation of resources, usually money, into assets or endeavors expected to generate income or profit over time.

Purchase Consideration

The total value transferred by an acquirer to purchase another company, including cash, securities, and other assets or liabilities undertaken.