When the Balance of the Income Summary Account Is a Debit

question 81

Multiple Choice

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

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

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Definitions:

Monopsonist

A situation in the market where a single buyer dominates, possessing substantial control over the pricing of a product or service.

Nominal Wage

The wage paid to workers measured in current dollars, without adjustment for inflation.

Price Level

refers to the average of current prices across the entire spectrum of goods and services produced in the economy, often compared over time to assess inflation.

Real Wage

The purchasing power of wages, considering the effect of inflation, representing the quantity of goods and services that can be bought with those wages.