Which of the Following Is Not True About Closing Entries

question 169

Multiple Choice

Which of the following is not true about closing entries?

• A) There are two closing entries that update the owner's equity account.
• B) After the first closing entry, the owner's capital account has been increased (decreased) by the amount of 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:

Federal Reserve

The Federal Reserve is the central banking system of the United States, responsible for monetary policy, regulation of financial institutions, and stability of the financial system.

Interest Rates

The cost of borrowing money or the rate paid for deposits, typically expressed as a percentage.

Aggregate Demand

The overall desire for goods and services within an economy, identified at a given price level and during a specified timeframe.

Taxes

Mandatory monetary fees or different forms of taxes levied on a taxpayer by a government entity to finance government operations and a range of public expenses.