One Purpose of Closing Entries Is to Zero Out the Balances

question 60

Multiple Choice

One purpose of closing entries is to zero out the balances in the:

• A)liability and capital accounts.
• B)expense and capital accounts.
• C)asset and liability accounts.
• D)revenue and expense accounts.

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Definitions:

Resource Prices

The cost associated with acquiring resources necessary for production, including raw materials, labor, and capital.

Increasing-Cost Industry

An industry where production costs begin to rise as the industry's output expands, often due to resource limitations or increased prices of inputs.

Minimum Long-Run ATC

The lowest point on the Average Total Cost curve when a firm operates in an efficient scale over the long term.

Increasing-Cost Industry

An industry in which production costs increase as industry output expands, often due to resource limitations or higher input costs.