The Income Summary Account Is an Important Account That Is

question 152

Multiple Choice

The Income Summary account is an important account that is used

• A) during interim periods.
• B) in preparing adjusting entries.
• C) annually in preparing closing entries.
• D) annually in preparing correcting entries.

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Definitions:

Compensation

Payment or benefits provided to employees in exchange for their work or services.

Accrue a Liability

The process of recognizing liabilities that have been incurred but not yet paid or recorded in the financial statements.

Current Maturities

The portion of a company’s long-term debt that is due to be paid within the next fiscal year, often classified under current liabilities.

Long-term Debt

Financial obligations owed by a company that are due more than one year in the future, typically including bonds, long-term loans, and lease liabilities.