In which statement,the account balances are reversed to zero on a monthly basis?
A)Balance Sheet
B)Cash Flow Statement
C)Income Statement
D)All of the above

Question

Quizplus · Accepted Answer

Reversing account balances to zero on a monthly basis is a process known as zero-based budgeting. This process is typically used in the preparation of income statements to ensure that recurring expenses are justified every month. Therefore, the correct answer is option C, the Income Statement. Options A and B are not correct because zero-based budgeting is not used in the preparation of the balance sheet or cash flow statement.

In Which Statement,the Account Balances Are Reversed to Zero on a Monthly