The Entries That Transfer the Revenue, Expense, and Withdrawal Balances

question 156

Multiple Choice

The entries that transfer the revenue, expense, and withdrawal balances to the Owner's Name, Capital account to set these balances to zero for the next period are called:

• A)closing entries.
• B)opening entries.
• C)adjusting entries.
• D)temporary accounts.

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Definitions:

Cash Flows

The inflow and outflow of cash and cash equivalents, indicating a company's financial health and liquidity.

Capital Expenditure

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Net Present Value

The disparity between the current value of cash coming in and the current value of cash going out over a specific duration.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue.