An Error Has Occurred in the Closing Entry Process If

question 82

Multiple Choice

An error has occurred in the closing entry process if

• A)revenue and expense accounts have zero balances.
• B)the retained earnings account is credited for the amount of net income.
• C)the dividends account is closed to the retained earnings account.
• D)the balance sheet accounts have zero balances.

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Definitions:

Unrealized Holding

Gains or losses on investments that a company has not sold yet and hence are not recorded in the financial statements.

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically featuring fixed terms, including interest payments and future repayment of principal.

Preferred Stocks

Shares of stock that have priority over common stock in terms of dividend payments and assets in the event of a liquidation.