Closing Entries Are Required

question 137

Multiple Choice

Closing entries are required:

• A) If the temporary accounts are to reflect correct amounts for each accounting period.
• B) Only if the company adheres to the accrual method of accounting.
• C) If a company's bookkeeper does not choose to prepare reversing entries.
• D) If management has decided to cease operating the business.
• E) In order to satisfy the Internal Revenue Service guidelines.

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Definitions:

Senior Executives

Top-level managers or administrators in an organization responsible for making strategic decisions and overseeing the entire operation.

Complex

Consisting of many different and connected parts, making something difficult to understand or to find a solution for.

Formalization

The extent to which roles, rules, and procedures in an organization are standardized and written down.

Organizational Flexibility

The ability of an organization to adapt to changes, pivot strategies, and adjust its operational processes to meet business or market demands.