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Refer to the figure shown. What is occurring at point 5?
Owner's Capital
The amount of money and assets invested in a business by its owner, minus any withdrawals.
Net Income
The residual financial gain of a business following the deduction of every expense, tax, and cost from its total revenue.
Accounting Cycle
The collective process of recording and processing the accounting events of a company, culminating in the production of financial statements within a specific period.
Income Summary
An account used in the closing process that summarizes the revenues and expenses for an accounting period before transferring the net income or loss to owner's equity.
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