Closing Entries

question 91

Multiple Choice

Closing entries:

• A) are made at the beginning of each accounting period.
• B) prepare the accounts for the next period's transaction.
• C) cannot be done using a computer.
• D) are the same as adjusting entries.

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Definitions:

Trading Securities

Financial instruments bought and held primarily for the purpose of selling them in the near term to profit from price changes.

Short-Term Investments

Financial assets that are easily convertible to cash usually within a year, intended for temporary holding.

Current Asset Section

Part of a company's balance sheet that lists assets likely to be converted into cash within one fiscal year or operating cycle.

Available-for-Sale Security

Financial assets such as stock or bonds that are not classified as held-to-maturity or trading securities and can be sold in the marketplace.