There Are Two Closing Entries

question 204

Multiple Choice

There are two closing entries. The first one is to close _____; the second one is to close _____.

• A) revenues and expenses, the drawing account
• B) revenues, expenses and the drawing account
• C) revenues, expenses
• D) the drawing account, revenues

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Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remains constant regardless of the level of production or output volume.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor directly involved in manufacturing.

Annual Wheel Needs

The total requirement for wheels within a one-year period, usually in the context of manufacturing or automotive maintenance.

Intermediate Products

Products that are in a semi-finished state; they require further processing before becoming final goods sold to the end consumer.