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:

Lump Sum Payment

A one-time payment for the total amount due, rather than breaking it down into multiple payments over time.

Leisure

The time individuals spend away from work or productive activities, often used for relaxation or recreational activities.

Wage Rate

The fixed amount of money or compensation paid to an employee by an employer in exchange for work performed.

Labor Income

Earnings derived from work or employment, including wages, salaries, and other compensation.