Assume That an Organization's Operations Result in a Net Profit

question 29

Multiple Choice

Assume that an organization's operations result in a net profit for the year.When the books are closed,what is the accounting effect of the journal entry that closes out the net profit?

• A)it is added to the cash balance
• B)it is subtracted from the cash balance
• C)it is added to the opening balance of owner's equity
• D)it is subtracted from the liabilities

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Definitions:

Assignor

An individual or entity that transfers rights or interests in a contract to another, known as the assignee.

Assignee

A person or entity to whom rights or interests are transferred by another, known as the assignor.

Delegator

A delegator is a person or entity that assigns duties or responsibilities to another, often in the context of a contractual or work-related relationship.

Non-assignable

A characteristic of a contract or right indicating that it cannot be transferred or delegated to another party without the consent of the original party or parties.