Match Each of the Following Terms with the Appropriate Description

question 30

Multiple Choice

Match each of the following terms with the appropriate description in the context of a consolidated Federal income tax return.
-Binding nature of election over multiple tax years.

• A)Advantage of consolidating
• B)Disadvantage of consolidating
• C)Neither an advantage nor a disadvantage

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Definitions:

Income Summary

An account used in the closing process, summarizing all revenues and expenses for a period, to transfer the net result to capital accounts.

Capital Account

A capital account is an account on a company's balance sheet that represents the equity investment of owners and shareholders.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent equity account.

General Ledger

A thorough collection of financial records that documents every financial transaction undertaken by a business.