Under a Periodic Inventory System, Closing Entries Will Include

question 219

Multiple Choice

Under a periodic inventory system, closing entries will include

• A) debits to Sales, Purchases Returns and Allowances, and Purchases Discounts
• B) credits to the Allowance for Doubtful Accounts
• C) adjustments to the inventory account to match physical inventory
• D) all of these

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Definitions:

Accounting Profit

The financial gain calculated by subtracting total explicit costs from total revenue, reflecting the company's bookkeeping earnings.

Explicit Costs

Payments made directly to individuals or entities in the operation of a business, including salaries, rental fees, and costs of materials.

Average Variable Cost

The total variable cost divided by the number of units produced, representing the average cost per unit of output that varies with production.

Average-Fixed-Cost Curve

A graphical representation that shows the average fixed costs of production at different levels of output.