2. Which of the following statements about closing entries is false? Closing ent

Question

2. Which of the following statements about closing entries is false? Closing entries are prepared only at the end of the organization's year. b. a. If there has been a net loss for the year, the Income Summary account is closed by a debit. c. The total debits and total credits must be equal for each closing entry d. Every revenue and expense account must be closed out to zero. e. Closing entries are prepared after all transactions and adjusting entries have been prepared and posted to the general ledger.

Explanation / Answer

The Statement b. If there has been a net loss for the year, the Income Statement Summary account is closed by a debit is false.

Explanations:

The option a., c., d., & e. are correct in case of closing entries.

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