Which of the Following Is Not True About Closing Entries

question 91

Multiple Choice

Which of the following is not true about closing entries?

• A) There are four closing entries that update the stockholders' equity account.
• B) After the second closing entry, the income summary account is equal to the net income or loss for the period.
• C) All real accounts are closed at the end of the period.
• D) By closing nominal accounts at the end of the period to zero, it is possible to isolate next period's information correctly.

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Definitions:

Price of Labor

The wage rate or the cost of hiring workers in the labor market.

Minimize Costs

The process of finding ways to reduce expenses and lower the cost of production in order to increase profitability.

Last Dollar

The concept of last dollar refers to the final portion of funding or resources available for a project, initiative, or individual, often indicating the utilization of all available funds.

Minimize Costs

The process or strategy of reducing expenses to the lowest possible level while maintaining efficiency.