To What Account Is the Balance in the Income Summary

question 79

Multiple Choice

To what account is the balance in the Income summary account closed?

• A)The Capital account
• B)The Drawings account
• C)The Profit account
• D)The Revenue account

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Definitions:

Current Assets

Assets owned by a company that are expected to be converted into cash, sold, or consumed within a year or within the operating cycle.

Gross Profit

The difference between total revenue and the cost of goods sold, before deducting any selling, administrative, or other expenses.

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting overheads, salaries, and other operating expenses.

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities.