When Closing Entries Are Made

question 74

Multiple Choice

When closing entries are made:

• A) All ledger accounts are closed to start the new accounting period.
• B) All temporary accounts are closed but not the permanent accounts.
• C) All real accounts are closed but not the nominal accounts.
• D) All permanent accounts are closed but not the nominal accounts.
• E) All balance sheet accounts are closed.

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Definitions:

Contribution Format

A way of presenting income statements where variable costs are deducted from sales to find the contribution margin, then fixed costs are deducted to find net operating income.

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The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Unit Sales

The total quantity of products sold within a specific period, not accounting for price or cost.

Cost-Volume-Profit Relationships

An analysis tool that helps understand how changes in cost and volume affect a company's profits.