To Which of the Following Accounts Should the Balance in the Income

question 44

Multiple Choice

To which of the following accounts should the balance in the Income Summary account be closed?

• A)Owner's Name, Withdrawals
• B)Net Income
• C)Owner's Name, Capital
• D)Service Revenue

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Definitions:

Extra Income Effect

The change in an individual's consumption choices resulting from a change in real income, due to factors other than a direct income increase.

Endowment

The total resources available to an individual or entity, which can include wealth, assets, or resources in an economic context.

Normal Good

A type of good for which demand increases as the income of individuals increases, holding everything else constant.

Wage Rate

The standard amount of compensation given to employees for services rendered, usually expressed per hour or year.