The Entry to Close the Income Summary Account to Capital

question 33

Multiple Choice

The entry to close the Income Summary account to Capital was omitted, and there was a net income for the period. This error would cause:

• A) the Capital account to be understated.
• B) Inventory to be overstated.
• C) Revenue to be understated.
• D) the Capital account to be overstated.

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Definitions:

Illegal

Referring to actions or activities that are prohibited by law.

Promotional Allowances

Financial incentives offered by manufacturers to retailers or wholesalers to encourage the sale or stocking of products.

Robinson-Patman Act

A 1936 United States federal law aimed at preventing unfair competition and price discrimination by regulating trade practices.

Across-The-Board

A term referring to actions or changes that apply uniformly to everything or everyone within a certain context or organization.