When the Balance of the Income Summary Account Is a Credit

question 59

Multiple Choice

When the balance of the Income Summary account is a credit, the entry to close this account is

• A) debit Capital, credit Income Summary.
• B) debit Income Summary; credit Revenue.
• C) debit Income Summary; credit Capital.
• D) debit Revenue; credit Income Summary.

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Definitions:

Indirect Materials

Materials used in the production process but not directly traceable to a finished product, often included as part of manufacturing overhead costs.

Work in Process

Partially finished goods that are in the process of being converted into final products within a manufacturing process.

Cost of Goods Manufactured

The total cost incurred to produce products during a specific period, including costs of direct materials, direct labor, and manufacturing overhead.

Direct Materials

Basic materials that are directly involved in the creation of a product and form a crucial part of the completed item.