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:

Firm Manager

A firm manager is an individual responsible for overseeing the administrative operations, managing staff, and ensuring the efficient running of a firm or business.

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The financial process of transforming illiquid assets into securities by pooling various financial assets and then selling them to investors.

Corporate Regulation

Rules or laws designed to control or govern the conduct of corporations and ensure they operate within legal and ethical bounds.

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A form of business organization managed by trustees for the benefit of its beneficiaries, offering benefits like reduced taxation and liability protection.