Author Question: The owner's Capital account will always have a zero balance after the closing entries are posted. ... (Read 43 times)

strangeaffliction · **on:** Jul 6, 2018

The owner's Capital account will always have a zero balance after the closing entries are posted.
a. True
b. False
Indicate whether the statement is true or false

Question 2

The gross profit margin is increasing for a firm. Give three reasons that could explain the increase.

What will be an ideal response?

fromAlphatoOmega22 · **Reply #1 on:** Jul 6, 2018

Answer to Question 1

False

Answer to Question 2

Three reasons that gross profit margin might be increasing are:
a, the selling price has increased without a proportional increase in cost of goods sold
b, the cost of goods sold are decreasing without a proportional increase in sales
c, cost of goods sold contains fixed costs and the volume of sales has increased