The Third Step in the Closing Process Is to Transfer

question 79

Multiple Choice

The third step in the closing process is to transfer the balance in which of the following accounts to the permanent owner's equity account?

• A) Revenue
• B) Expense
• C) Income Summary
• D) Owner's Capital

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Definitions:

Economic Rent

The extra income earned by a resource over its opportunity cost.

Price of Gas

The cost per unit (usually per gallon or liter) of gasoline, which can vary based on factors like location, demand, and taxes.

Backward-Bending Labor Supply Curve

A labor supply curve that illustrates how an individual's supply of labor can decrease as wages increase beyond a certain point, due to the preference for leisure over income.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods or services.