Indicate Whether Each of the Following Statements About the Closing

question 14

Essay

Indicate whether each of the following statements about the closing process and the accounting cycle is true or false.
_____ a) The closing process transfers certain account balances to retained earnings at the end of the accounting cycle.
_____ b) Only accounts that appear on the income statement are closed at the end of each accounting cycle.
_____ c) The permanent accounts contain information that is cumulative in nature.
_____ d) The retained earnings balance at the end of any given year is equal to that year's net income.

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Definitions:

Federal Statutes

Laws enacted by the national government of a country.

State Statutes

Laws established by state legislatures that govern state-specific legal issues and matters.

Market Value

The ongoing rate at which an asset or service is offered for buying or selling in a market.

Note Payable

A written promise to pay a specified sum of money, plus interest, to a creditor at a future date.