The Special Account Used Only in the Closing Process to Temporarily

question 237

Multiple Choice

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the:

• A)Income Summary account.
• B)Closing account.
• C)Balance column account.
• D)Contra account.
• E)Nominal account.

---

Definitions:

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities; also known as shareholder's equity.

Cash Dividend

A distribution of a company's earnings to its shareholders as actual cash.

Assets

Resources owned or controlled by a person or business, which are expected to produce economic value or benefit in the future.