The accounting cycle comprises ten steps.Companies that use XBRL do not have to:
A)Prepare journal entries.
B)Close the nominal accounts.
C)Both prepare journal entries and close the nominal accounts.
D)Neither prepare journal entries nor close the nominal accounts.

Question

Quizplus · Accepted Answer

XBRL (eXtensible Business Reporting Language) is a digital reporting language used for financial reporting. It does not affect the traditional accounting cycle or any of its steps, so companies that use XBRL will still have to prepare journal entries and close nominal accounts in addition to using the XBRL format for reporting purposes. The only difference is that the financial information will be communicated in a structured format that can be analyzed more efficiently. Therefore, the best choice is D, which states that companies that use XBRL still have to prepare journal entries and close nominal accounts.

The Accounting Cycle Comprises Ten Steps