Which of the Following Statements Is True of a Post-Closing

question 23

Multiple Choice

Which of the following statements is true of a post-closing trial balance?

• A) Its debits must equal its credits
• B) It lists all real and nominal account balances
• C) It may be prepared before the closing process to provide some assurance that the previous steps in the cycle have been performed properly
• D) All of these are true

Calculate net advantage to leasing (NAL) and understand its implications.

Understand and apply the concept of depreciation tax shields and their impact on leasing and buying decisions.

Apply the concept of after-tax lease payments in analyzing financial decisions.

Understand how different tax rates affect leasing versus buying decisions.

---

Definitions:

Fixed Costs

Expenses that do not change with the level of output or sales over a short period, such as rent, salaries, and insurance.

Variable Costing

An accounting method that only assigns variable costs to inventory, with fixed manufacturing overhead expenses charged to expense as incurred.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Absorption Costing

A bookkeeping approach that encompasses all production expenses, including both constant and fluctuating costs, in the price of a good.