What Are the Purposes of Closing Entries

question 12

Essay

What are the purposes of closing entries?

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Definitions:

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Common Stockholders' Equity

Represents the equity invested by common shareholders, along with retained earnings or losses.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to reinvest in its core business or to pay debt.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains the same.