Which of the Following Statements Is Not Correct

question 11

Multiple Choice

Which of the following statements is not correct?

• A)After closing entries are posted, the revenue, expense, and drawing accounts will have zero balances.
• B)A post-closing trial balance will not contain revenue and expense account balances.
• C)Adjusting entries must be journalized and posted before the closing entries are journalized and posted.
• D)At the end of each accounting period, asset and liability account balances are reduced to zero.

---

Definitions:

Coase Theorem

The proposition that even in the presence of externalities an economy can always reach an efficient solution as long as transaction costs are sufficiently low.

Transaction Costs

Expenses incurred when buying or selling goods and services, beyond the price of the goods themselves.

Sulfur Emissions

Gaseous emissions that include sulfur compounds, primarily sulfur dioxide, resulting from combustion processes and industrial activities.

Coase Theorem

A principle that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own, leading to an efficient outcome.