Figure 8-3 -Which Point or Points on Figure 8-3 Illustrate an Eventual

question 30

Multiple Choice

Figure 8-3
-Which point or points on Figure 8-3 illustrate an eventual long-run equilibrium?

• A)Point A
• B)Point B
• C)Point C
• D)Points A and C

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Definitions:

Temporary Accounts

Accounts used to collect revenues, expenses, and dividends information which are then transferred to permanent accounts at the end of the accounting period.

Closed

Refers to an account or period that has been concluded and no longer accepts entries or transactions.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is exchanged.

Adjusting Entries

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.