The Balance in the Income Summary Account Before It Is

question 19

Multiple Choice

The balance in the income summary account before it is closed will be equal to

• A) the net income or loss on the income statement.
• B) the beginning balance in the retained earnings account.
• C) the ending balance in the retained earnings account.
• D) zero.

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Definitions:

Straight-Line Method

The straight-line method is a depreciation technique that allocates an even portion of an asset's cost to each year of the asset's useful life.

Accumulated Depreciation

The total sum of depreciation expense that has been recorded on a company's assets up to a specific date, reflecting the loss of asset value over time.

Salvage Value

An asset's expected retainable value at the end of its beneficial life.

Invoice Cost

The total cost shown on an invoice, comprising the purchase price of goods/services, along with taxes, shipping, and any other fees.