If the Adjusting Entry to Transfer Net Income/Owner's Equity into the Owner's

question 6

Multiple Choice

If the adjusting entry to transfer Net Income/Owner's Equity into the owner's capital account is made prior to the end of the year, the Balance Sheet shows _______.

• A)Owner's Equity
• B)Net Income
• C)both Net Income and Owner's Equity
• D)none of the above because the income/earnings has been transferred into capital

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Definitions:

Negotiated Price Approach

A pricing strategy where the final sale price of a product or service is determined through bargaining between the buyer and the seller.

Market Price Approach

An approach to transfer pricing that uses the price at which the product or service transferred could be sold to outside buyers as the transfer price.

Transfer Prices

Prices set for the sale of goods and services between controlled or related legal entities within an enterprise.

Market Price Approach

The market price approach is a method used to value assets based on the current market price of similar or identical assets.