When Income Summary Has a Credit Balance and the Account

question 74

Multiple Choice

When Income Summary has a credit balance and the account is closed:

• A) Capital is decreased.
• B) Capital is increased.
• C) Withdrawals is increased.
• D) Revenue is decreased.

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Definitions:

FOB Shipping Point

A term indicating that the buyer assumes responsibility for the goods and the cost of transportation at the point of departure from the seller's shipping point.

Shipping Costs

These are expenses incurred in transporting goods from one location to another, typically covered by the seller or the buyer, depending on the shipping terms.

GAAP

Generally Accepted Accounting Principles (GAAP) are a collection of commonly followed accounting rules and standards for financial reporting.

IFRS

International Financial Reporting Standards, which are globally accepted guidelines for financial reporting established by the International Accounting Standards Board.