When the Balance in the Income Summary Account Is a Debit

question 88

Multiple Choice

When the balance in the Income Summary account is a debit, the company has:

• A) incurred a net loss.
• B) incurred a net income.
• C) had more revenue than expenses.
• D) made an error in their closing entries.

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Definitions:

Four-firm Concentration Ratio

An indicator of the extent to which the four largest firms dominate an industry, measured by their combined market share.

Herfindahl Index

A measure of market concentration, calculated by summing the squares of the market shares of all firms in the market.

Four-Firm Sales Concentration Ratio

A measure indicating the total market share of the four largest firms within an industry, used to assess the level of market competition.

Geographic Concentration

The phenomenon where certain industries or businesses are clustered in specific regions, often due to advantages like resources or skilled labor.