The Financial Statements of a Business Entity

question 104

Multiple Choice

The financial statements of a business entity:

• A)Include the balance sheet,income statement,and income tax return.
• B)Provide information about the cash flow prospects of the company.
• C)Are the first step in the accounting process.
• D)Are prepared for a fee by the Financial Accounting Standards Board.

---

Definitions:

Rent Revenue

Income earned from leasing out property or space to tenants.

Year-End Closing Process

The series of steps taken by businesses at the end of an accounting year to close out books, including reconciling accounts and preparing financial statements.

End-Of-Period Spreadsheet

A tool used in accounting to gather all the balances of ledger accounts to calculate adjustments and prepare financial statements at the end of an accounting period.

Closing Entry

A journal entry made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, essentially resetting the temporary accounts for the new period.