Current Liability Accounts Are Closed at the End of the Accounting

question 87

True/False

Current liability accounts are closed at the end of the accounting period to "zero out" the balance in Retained Earnings.

---

Definitions:

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Average Costs

The cost per unit of output, calculated by dividing total costs by the total number of units produced.

Variable Cost

Costs that fluctuate with the level of output or production, such as raw materials and direct labor.

Units Sold

The total number of individual items that have been sold over a specified time period.