The Closing Entry Process Consists of Closing

question 154

Multiple Choice

The closing entry process consists of closing

• A)all asset and liability accounts.
• B)out the retained earnings account.
• C)all permanent accounts.
• D)all temporary accounts.

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Definitions:

Preferred Stock

Preferred stock is a type of stock that grants holders specific privileges over common stockholders, typically including priority in dividend payments and asset liquidation.

Stockholders' Equity

Represents the owners' residual interest in the assets of a corporation after deducting liabilities, often detailed in the equity section of the balance sheet.

Capital Surplus

Excess amount received by a company over the par value of its stock, reflected in the shareholders' equity section of the balance sheet.

Retained Earnings

The portion of a company's profit that is held or retained and not paid out as dividends to shareholders, often used for reinvestment in the business or to pay off debt.