Closing an Account Means

question 32

Multiple Choice

Closing an account means:

• A) reducing the balance to zero.
• B) transferring the balance to the trial balance.
• C) transferring the balance to the balance sheet.
• D) removing the account from the ledger.

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Definitions:

Compounded Semiannually

An interest calculation method where interest is added to the principal amount twice a year, leading to interest on interest by the period's end.

Investment

A placement of capital in expectation of deriving income or profit.

Return on Investment

A measure used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments.

Deferred Tax Liability

A tax obligation owed by an entity in the future due to temporary differences between the book value of assets and liabilities and their tax value.