What Is the Correct Order for the Steps in the Closing

question 52

Multiple Choice

What is the correct order for the steps in the closing process?
I Close the drawings account to the owner's capital account
II Balance the owner's capital account
III Transfer the profit or loss to the owner's capital account
IV Close the income and expense accounts to the profit or loss summary account

• A) III, IV, II, I
• B) IV, III, I, II.
• C) IV, III, I, II
• D) IV, III, II, I.

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Definitions:

Deficiency

The lack of a required or necessary quality, amount, or degree, often used in financial contexts to denote a shortfall.

Foreclosure Auction

A public sale at which property is sold to the highest bidder following foreclosure.

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Situations where individuals or organizations face challenges in managing their finances, often leading to debt or bankruptcy.

Land Contract

A financing agreement for the purchase of real property, where the seller holds the title until the purchaser completes all installment payments.