Closing entries are important to managing a business because
A)the owners expect periodic reports of the progress of the business.
B)management needs to prepare budgets for future time periods.
C)to assess progress toward goals,managers need to divide the life of the business into relatively short time periods.
D)All of these choices.

Question

Quizplus · Accepted Answer

Closing entries at the end of each accounting period are necessary to correctly measure the progress of the business, prepare financial statements for owners, and analyze financial data to make decisions for the future. Therefore, all options mentioned in the choices are correct, making D the best choice. Without proper closing entries, financial reports could be inaccurate or out of date, making it difficult for owners and management to understand the true financial state of the business.

Closing Entries Are Important to Managing a Business Because