What Is the Correct Order for the Steps in the Closing

question 47

Multiple Choice

What is the correct order for the steps in the closing process?
I Transfer the profit or loss to the owner's capital account
II Balance the owner's capital account
III Close the drawings account 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) I, II, III, IV
• C) IV, III, I, II
• D) IV, III, II, I

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Definitions:

Current Account

A component of a country's balance of payments that includes the trade balance, net primary income, and net secondary income transactions with the rest of the world.

Balance of Trade

The net difference in value between a country's exports and imports over a certain period.

Free Trade

An economic policy that allows imports and exports between countries with few or no tariffs, quotas, or prohibitions.

Bilateral Trade Agreement

A trade pact between two countries to facilitate trading and commerce, reducing tariffs and other trade barriers to mutually benefit the economies of the two nations.