The Income Statement for the Month of June, 2014 of Taylor

question 104

Multiple Choice

The income statement for the month of June, 2014 of Taylor Enterprises contains the following information: The entry to close Income Summary to Retained Earnings includes

• A) a debit to Revenue for ₤8,000.
• B) credits to Expenses totalling ₤4,100.
• C) a credit to Income Summary for ₤3,900
• D) a credit to Retained Earnings for ₤3,900.

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Definitions:

Variable Cost

Costs that change in proportion to the level of goods or services produced by a business.

Production Level

The quantity of goods a company produces within a specified period, usually in relation to its capacity.

Cost-Volume-Profit Analysis

A financial analysis tool used to determine how changes in costs and volume affect a company's operating income and net income.

Future Costs

Expected or projected expenses that will be incurred in the future.