When Closing the Expense Account,which of the Following Accounts Will

question 122

Multiple Choice

When closing the expense account,which of the following accounts will also be closed?

• A)Purchases Returns and Allowances
• B)Merchandise Inventory
• C)Sales Returns and Allowances
• D)Owner's Capital

---

Definitions:

Period Cost

Costs that are expensed in the period in which they are incurred, not directly tied to production activities.

Committed Fixed Cost

Long-term fixed costs that cannot be easily altered in the short term, such as leases and depreciation on equipment.

Long-Term Equipment Lease

An agreement where a physical asset is rented for a longer duration, often exceeding one year, allowing the use of the asset without purchasing it.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, remaining constant over a period.