The Entry to Close the Expense Account(s) Was Entered in Reverse-Income

question 111

Multiple Choice

The entry to close the expense account(s) was entered in reverse-Income Summary was credited and the expense account(s) was/were debited. The result of this error is that:

• A) before closing it, Income Summary will have a credit balance.
• B) before closing it, Income Summary will have a debit balance.
• C) the assets will be understated.
• D) the liabilities will be understated.

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Definitions:

Imports

Products or services that are transported into a country from abroad with the intent of being sold.

International Trade

The trading of products, services, and money across the borders or territories of different countries.

Merchandise Exporting

The act of sending goods produced in one country to be sold in another country.

GATT

The General Agreement on Tariffs and Trade, an international trade treaty designed to boost economic recovery after World War II by reducing or eliminating trade barriers such as tariffs and quotas.