Which of the Following Accounts Is Not Closed to Income

question 118

Multiple Choice

Which of the following accounts is not closed to Income Summary?

• A) Cost of Goods Sold
• B) Inventory
• C) Sales Revenue
• D) Sales Discounts

---

Definitions:

Negative Externality

An adverse effect on a third party not directly involved in an economic transaction, often leading to market failure if not properly addressed.

Marginal Social Cost

The additional cost to society as a whole of producing one more unit of a good or service, including both private and external costs.

Marginal Damage Cost

The additional cost associated with producing one more unit of a good or service, considering the negative externalities.

Efficient Amount

This refers to the quantity of a good or service that maximizes social welfare, where the marginal benefit to consumers equals the marginal cost of production.