As a Result of Closing Entries Which of the Following

question 17

Multiple Choice

As a result of closing entries which of the following is true?

• A)Cash is increased.
• B)Retained earning is increased by the amount of income earned during the year.
• C)Total assets are increased by the amount of income earned during the year.
• D)Liabilities are decreased by the amount of income earned during the year.

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Definitions:

Income Trusts

Income trusts are investment vehicles that hold income-producing assets and distribute the income earned to the holders, commonly used in sectors like real estate and natural resources.

Free Cash Flow (FCF)

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Operating Expenses

These are costs associated with the day-to-day operations of a business, excluding costs of goods sold, taxes, and interest expenses.

Taking Deposits

The act of receiving funds from customers, under the agreement that the funds will be returned or made available for withdrawal upon the customer's request.