Which Account Has a Balance Equal to Net Income Immediately

question 161

Multiple Choice

Which account has a balance equal to net income immediately before it is closed?

• A) The Income summary account
• B) The Drawing account
• C) The Net Income account
• D) The Capital account

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Definitions:

Capital Flow

The movement of money for the purpose of investment, trade, or business production across international borders.

Industry's Short-run

A period in which at least one of a firm's inputs is fixed, limiting the firm's ability to adjust to changes in market demand.

General Equilibrium

A state in which all parts of the economy (supply, demand, prices) are in balance and all markets are at equilibrium.

Market Equilibrium

A situation in which market supply and demand balance each other, and as a result, prices become stable.