Author Question: How would the company's books be affected if the company's accountant failed to make any closing ... (Read 154 times)

abern · **on:** Jul 6, 2018

How would the company's books be affected if the company's accountant failed to make any closing entries?

Question 2

Operating profit margin is impacted by sales and all operating expenses except cost of goods sold.

Indicate whether the statement is true or false

Carissamariew · **Reply #1 on:** Jul 6, 2018

Answer to Question 1

If closing entries were not made, after the first year it would be difficult to separate the revenue and expenses of one fiscal period from those of another fiscal period, because revenue and expenses would spill over from one period to another period. Also, it would not be possible to determine the current balance of the owner's Capital account.

Answer to Question 2

T