The Last Step in the Accounting Record-Keeping Process Is

question 34

Multiple Choice

The last step in the accounting record-keeping process is:

• A)making adjusting journal entries to the accounts to correct errors and to reflect the financial statement impacts of items that occur because of usage or the passage of time.
• B)preparing the income statement for the period from amounts in the income statement accounts.
• C)closing the temporary income statement accounts to retained earnings.
• D)preparing the balance sheet from amounts in the balance sheet accounts.
• E)preparing the statement of cash flows from balance sheet amounts and from details of transactions affecting the cash account.

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Definitions:

Price/Earnings Ratio

A valuation metric for a company that measures its current share price relative to its per-share earnings.

Growth Opportunities

Potential scenarios or plans that a company can undertake to increase its market share, revenues, or profitability.

Implied Share Price

The calculated value of a share based on future earnings expectations or business prospects.

Earnings Multiple

A valuation metric that indicates the ratio of a company's market price per share to its earnings per share (EPS), commonly used to gauge stock valuation.