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Closing Entries Are Unnecessary If the Business Plans to Continue

question 15

True/False

Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year.


Definitions:

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and loan payments.

Operating Leverage

A measure of how sensitive a company's operating income is to changes in revenue, indicating the degree of fixed versus variable costs.

Fiscal Policy

Government policies regarding taxation and spending to influence the economy.

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