The Term 'Operative' Refers to an Entity That Has a Distinct

question 109

True/False

The term 'operative' refers to an entity that has a distinct purpose, includes people and has a deliberate structure.

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Definitions:

Retained Earnings

The portion of net income that is kept by the company rather than distributed to its shareholders as dividends.

Revenue

Cumulative income generated through the primary business functions of a company, involving the transaction of goods or services.

Closing Entry

Journal entries made at the end of an accounting period to transfer balances from temporary accounts to permanent ones and prepare the company's books for the next period.

Income Summary

An account in the ledger that is used to gather all temporary accounts during the closing process, to transfer their balances to permanent accounts.