The First Step in the Closing Process Is to Close

question 15

Multiple Choice

The first step in the closing process is to close

• A) the drawing account.
• B) the capital account.
• C) the revenue accounts.
• D) the expense accounts.

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Definitions:

IRS Method

A term not specifically defined but often refers to the procedures, formulas, or rules established by the IRS for calculating taxes, deductions, and credits.

Royalty Income

Income derived from the use of an individual's property, such as patents, copyrights, music, or books, typically based on a percentage of revenues.

Schedule E

A form used by the IRS for taxpayers to report income and expenses from rental real estate, royalties, partnerships, S corporations, trusts, and residual interests in REMICs.

Royalty Income

Income earned from the right to use intellectual property or natural resources.