After Closing the Revenue and Expense Accounts, Income Summary Showed

question 63

Multiple Choice

After closing the revenue and expense accounts, Income Summary showed a debit balance of $2,500. Which of the following statements is TRUE?

• A) The company had a net loss of $2,500.
• B) The company had a net income of $2,500.
• C) The company's cash increased $2,500.
• D) None of these answers are correct.

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Definitions:

Savings Account

An account for deposits located at a bank or another financial institution, which ensures the safety of the principal amount and offers a small interest rate.

Discount Rate

It's the interest rate used in the process of discounted cash flow analysis to establish the current value of anticipated future cash flows.

Present Value

Present Value (PV) is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Donation

A voluntary gift or contribution of money or goods to a charitable organization or cause.