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

Recognize the importance of seasonal adjustments in forecasting.

Understand product strategy adjustment based on complementary demands to mitigate seasonal fluctuations.

Identify the advantages of using computer monitoring for forecast adjustments.

Differentiate between short-range, medium-range, and long-range forecasting.

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Definitions:

Selling Price

The price at which a product or service is sold to customers, reflecting the cost plus any added profit margin.

Acquisition Differential

This refers to the difference between the purchase price of a company and the fair value of its identifiable net assets.

Straight Line Amortization

A method of gradually writing off the initial cost of an asset over its useful life in equal installments.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy, including decisions on the composition of the board of directors.