Closing Entries May Be Prepared from All of the Following

question 129

Multiple Choice

Closing entries may be prepared from all of the following except

• A) adjusted balances in the ledger.
• B) income statement and balance sheet columns of the worksheet.
• C) balance sheet.
• D) Income and owner's equity statements.

---

Definitions:

Indirect Method

In financial accounting, this method is used to prepare the cash flow statement, adjusting net income for changes in non-cash accounts to calculate cash flow from operating activities.

Operating Activities

Activities related directly to the production, sale, and delivery of a company's products and services, as reflected in its cash flow.

Cash Collected

The total amount of money received by a company from its various sources during a particular period, including sales, investments, and financing activities.

Cash Equivalents

Short-term investments with original maturities of three months or less that are readily convertible to cash and whose value is unlikely to change.