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:

AGI Phaseout Rules

Guidelines that gradually reduce or eliminate certain deductions and credits as adjusted gross income (AGI) reaches specified levels.

Qualified Pension Plan

A retirement plan conforming to IRS requirements, offering tax advantages and benefits to employees.

Deducted Immediately

Expenses that can be subtracted from gross income in the year they are incurred, without capitalization or amortization.

Employer-sponsored Retirement Plan

An employer-sponsored retirement plan is a savings plan set up by employers to help employees prepare for retirement, with common types being 401(k) and 403(b) plans.