The Following Information Is from the Income Statement of the Dirt

question 302

Multiple Choice

The following information is from the Income Statement of the Dirt Poor Laundry Service: The entry to close the Service Revenue account includes a:

• A) debit to Service Revenue for $5,500.
• B) credit to Service Revenue for $5,500.
• C) debit to Income Summary for $5,500.
• D) debit to Retained Earnings for $5,500.

Learn how to prepare and interpret a personal balance sheet.

Understand the distinction between gross pay, net pay, and the role of taxes in personal finance.

Calculate and interpret net worth and its significance.

Identify different types of liabilities and understand their impact on personal finance.

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Definitions:

Fair Dealing

A legal doctrine used in various jurisdictions that allows for limited use of copyrighted works without permission for purposes like research, criticism, or news reporting, akin to the fair use doctrine in the US.

Voidable Title

A legal situation in which a transfer of title to property or goods can be nullified if certain conditions are met, typically involving fraud or mistake.

Buyer in the Ordinary Course of Business

A buyer in the ordinary course of business purchases goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the routine course of the seller’s business.

Good Faith Purchaser

An individual who buys property without knowledge of any existing claims or defects in the title of the property, thereby acquiring uncontested ownership.