Closing the Temporary Accounts at the End of Each Accounting

question 5

Multiple Choice

Closing the temporary accounts at the end of each accounting period:

• A) Serves to transfer the effects of these accounts to the proper equity account on the balance sheet.
• B) Prepares the withdrawals account for use in the next period.
• C) Gives the revenue and expense accounts zero balances.
• D) Gives the withdrawals account a zero balance.
• E) All of these answers are correct.

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Definitions:

Disinflation

Occurs when the rate of inflation declines.

Monetarist View

An economic theory which argues that management of the nation's money supply is the key to controlling inflation and other forms of economic instability.

Economic Stabilization

Efforts or policies aimed at maintaining economic growth, controlling inflation, and reducing unemployment to achieve a stable economy.

Discretionary Policies

Economic strategies and decisions made by a government that can be altered or adjusted in response to changing economic conditions.