Sales Revenues Were $20,000,Sales Returns and Allowances Were $300,Sales Discounts

question 85

Multiple Choice

Sales revenues were $20,000,Sales Returns and allowances were $300,Sales discounts were $700,Cost of goods sold were $12,000,and all other expenses totaled $4,500.The second closing entry would include which of the following line items?

• A) Debit to Income summary of $17,500
• B) Credit to Income summary of $16,500
• C) Debit to Income summary of $4,500
• D) Debit to Income summary of $16,500

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Definitions:

Complementary Products

Products that are used together or enhance the value or experience of each other, leading to increased demand when sold together.

Marked Down

Refers to products that have their prices reduced, usually to encourage quick sales or clear out inventory.

Demand Increase

A rise in the quantity of a product or service that consumers are willing and able to purchase at a given price over a certain period of time.

Maintained Markup

The difference between the retail price and the cost of an item to the retailer, maintained as a percentage of the retail price.