A State of __________ Exists Whenever the Ratio of One

question 22

Short Answer

A state of __________ exists whenever the ratio of one person's outcomes to inputs equals the ratio of another's outcomes to inputs.

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Definitions:

Income Summary

An account used in the closing process that summarizes revenues and expenses for a period, transferring the net income or loss to the owner's equity.

Revenue

The aggregate financial gain acquired by a company from its essential sales activities involving goods or services.

Credit Normal Balance

The usual balance side for credit accounts, typically seen in liabilities, equity, and revenue accounts.

Adjusting Entry

Journal entries made at the end of an accounting period to update accounts for accurate financial reporting.