Which of the Following Transactions Could Cause the Income Summary

question 41

Multiple Choice

Which of the following transactions could cause the Income Summary account to be debited and Capital to be credited?

• A) The business earned a net loss for the period.
• B) The business earned a net income for the period.
• C) Closed the Owner's Capital account
• D) A credit balance in the Owner's Withdrawals account

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Definitions:

Deductive Reasoning

A reasoning strategy where a judgment is drawn from the alignment of various propositions typically considered factual.

Inductive Reasoning

A method of reasoning in which specific observations or data are analyzed to form a general conclusion or principle.

Abductive Reasoning

A type of logical inference which begins with an observation then seeks to find the simplest and most likely explanation.

Retroductive Reasoning

A form of reasoning that starts from an observed effect and works backward to hypothesize a cause; also known as abductive reasoning.