The Capital Account Has an Ending Balance of $17,000 and a Beginning

question 19

Multiple Choice

The capital account has an ending balance of $17,000 and a beginning balance of $12,500. If withdrawals were $13,500, then the income summary account had a balance of ________ before closing.

• A)$18,000 credit
• B)$4,500 credit
• C)$3,500 credit
• D)$18,000 debit

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Definitions:

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including both short-term and long-term debts.

Total Equity

The total net value of a company, calculated as the difference between total assets and total liabilities, representing the ownership interest of the shareholders.

Working Capital

The difference between a company’s current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Year-End Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at the end of a fiscal year.