Closing the Temporary Accounts at the End of Each Accounting

question 85

Multiple Choice

Closing the temporary accounts at the end of each accounting period does all of the following except:

• A) Serves to transfer the effects of these accounts to the owner's capital 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) Has no effect on the owner's capital account.
• E) Causes owner's capital to reflect increases from revenues and decreases from expenses and withdrawals.

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Definitions:

Quantity Supplied

The amount of a certain good or service that producers are willing to supply at a given price.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, inversely related to the consumer's income.

Complementary Good

A product that is consumed with another product, where demand for one increases demand for the other.

Normal Good

A good for which demand increases as the income of consumers increases.