Closing Entries Are Required

question 175

Multiple Choice

Closing entries are required:

• A)If management has decided to cease operating the business.
• B)Only if the company adheres to the accrual method of accounting.
• C)If a company's bookkeeper does not choose to prepare reversing entries.
• D)So that Revenue,expense,and dividends accounts must begin each period with zero balances.
• E)In order to satisfy the Internal Revenue Service guidelines.

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Definitions:

Environmental Force

Refers to external factors such as social, economic, legal, and technological aspects that impact an organization's operations and can influence its performance and strategy.

Economic Recession

A significant decline in economic activity spread across the economy, lasting more than a few months.

2007-2009

The period marked by a significant global financial crisis, often referred to as the Great Recession, characterized by major declines in economic activity worldwide.

Economic Force

Factors such as inflation, unemployment rates, and economic growth that influence the business environment and economic policy.