If a business closes its accounts only at year-end

a. Monthly and quarterly financial statements cannot be prepared.

b. Adjusting entries are made only at year-end.

c. Financial statements are prepared only at year-end.

d. Revenue and expense accounts reflect year-to-date amounts throughout the year.

Question

Business

Gianni Dougherty

15 June, 09:46

If a business closes its accounts only at year-end

a. Monthly and quarterly financial statements cannot be prepared.

b. Adjusting entries are made only at year-end.

c. Financial statements are prepared only at year-end.

d. Revenue and expense accounts reflect year-to-date amounts throughout the year.

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Answers (1)

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Atkinson · Answer 1

The correct answer is letter "D": Revenue and expense accounts reflect year-to-date amounts throughout the year.

Explanation:

Most firms close their accounts by the end of the year because of accounting reporting purposes. It does not imply throughout the year the firm will not be able to make reports of their performance. They actually can but closing the account relevant for the report requested. By closing the accounts only by the end of the year, the revenue and expense accounts will show annual calculations in the upcoming period books.

If a business closes its accounts only at year-enda. Monthly and quarterly financial statements cannot be prepared.b. Adjusting entries are made only at year-end.c. Financial statements are prepared only at year-end.d. Revenue and expense accounts reflect year-to-date amounts throughout the year.