In Preparing Closing Entries for a Merchandising Company the Income

question 17

Multiple Choice

In preparing closing entries for a merchandising company the Income Summary account will be credited for the balance of

• A) sales revenue.
• B) inventory.
• C) sales discounts.
• D) freight-out.

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Definitions:

Balance Sheet

A summary statement of a firm's assets, liabilities, and equity held by shareholders, reflecting its financial position at a specific moment.

Percentage Increase

Percentage increase is calculating the extent of growth in a value over time, expressed as a proportion of the original value.

Comparative Balance Sheet

A comparative balance sheet presents the financial position of a company at two or more different points in time, allowing for analysis of trends and changes in assets, liabilities, and equity.

Horizontal Analysis

A financial analysis technique that compares line items in financial statements over a series of periods to identify trends and growth patterns.