After Both of the Entries for the Inventory Adjustment Have

question 44

Multiple Choice

After both of the entries for the inventory adjustment have been posted,the debit in the Income Summary account represents:

• A) Net Income
• B) Ending Inventory
• C) Beginning Inventory
• D) Cost of Goods Sold

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Definitions:

Cost Concept

An accounting principle that dictates that all assets are recorded and reported at their original purchase cost rather than their current market value.

Owner's Equity

The residual interest in the assets of a business after all liabilities have been deducted, often referred to as net assets or shareholder equity.

Assets

Resources owned by a business with future economic benefits.

Investments

The balance sheet caption used to report long-term investments in stocks not intended as a source of cash in the normal operations of the business.