Income Statement Accounts Are Closed at What Stage of the Accounting

question 30

Multiple Choice

Income statement accounts are closed at what stage of the accounting process?

• A)At the time that adjustments are made.
• B)After adjustments are made and before the income statement is prepared.
• C)After the income statement and the statement of retained earnings are prepared,but before the balance sheet is prepared.
• D)As the last journal entries at the end of each accounting year.

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Definitions:

Dynamic Equilibrium

A state of balance in a system where opposing processes occur at equal rates, maintaining a constant condition.

Reverse Reaction

A reverse reaction is a chemical reaction that occurs in the opposite direction of the forward reaction, resulting in the conversion of the reaction products back into the original reactants.

Forward Reaction

A chemical reaction that proceeds in the direction of forming products from reactants, as initially written in a chemical equation.

Dynamic Equilibrium

A situation in which two opposing processes occur at the same rate, leading to no net change in the system.