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.

Understand the use of aging method and percentage bases (sales and receivables) for estimating bad debts.

Grasp the significance of a reasonable amount of uncollectible accounts in evaluating a company's credit policy.

Calculate adjustments for bad debt expense and understand its impact on cash realizable value.

Identify and understand various medical terminologies and their meanings.

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Definitions:

Violent Criminal

An individual who commits crimes that involve the use or threat of physical force against others.

Mental Illness

A broad range of conditions that affect mood, thinking, and behavior, often diagnosed by a medical professional.

Tarasoff V. Regents

A legal case that established the duty of mental health professionals to warn identifiable victims when their client poses a risk of serious harm.

Duty To Warn

A legal or ethical obligation to notify potential victims or authorities if an individual poses a serious and foreseeable risk of harming themselves or others.