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Briefly Distinguish Between Adjusting and Closing Entries

question 126

Essay

Briefly distinguish between adjusting and closing entries.


Definitions:

Markup Per Unit

The sum added onto the purchase price of products to account for overhead costs and generate profit.

Unit Selling Price

The amount of money charged to the customer for a single unit of product or service.

Contribution Margin

The difference between sales revenue and variable costs, representing the amount that contributes to covering fixed costs and generating profit.

Contribution

The portion of sales revenue that exceeds variable costs, contributing towards covering fixed costs and generating profit.

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