Closing Entries Are Made

question 40

Multiple Choice

Closing entries are made

• A)to clear revenue and expense accounts of their balances.
• B)to clear withdrawals of its balance.
• C)to summarize a period's revenues and expenses.
• D)All of these choices.

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Definitions:

Depletion

The systematic allocation of the cost of natural resources over the period of their extraction and sale.

Natural Resource

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Depreciable Asset

An asset that loses value over time due to usage, wear and tear, or obsolescence, which can be an expense on the income statement over its useful life.

Fixed Asset

A long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income.