Which of the Following Accounts Would Not Be Closed to Income

question 35

Multiple Choice

Which of the following accounts would not be closed to Income Summary during the year-end closing process?

• A)Loss on Sale of Land
• B)Prepaid Rent
• C)Freight-In
• D)Sales Discounts

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Effective Interest Method

The effective interest method is a finance and accounting technique used to allocate loan or bond interest expense over the relevant period based on the loan's book value.

Journal Entry

A record in accounting that represents a transaction and shows the accounts affected and the amounts.

Sale

A transaction between two parties where the buyer receives goods, services, or assets in exchange for money or other forms of compensation.