Which of the Following Accounts Has a Balance Equal to Net

question 54

Multiple Choice

Which of the following accounts has a balance equal to Net Income immediately before it is closed?

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

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Definitions:

FIFO Method

First In, First Out, an inventory valuation method that assumes the items purchased or produced first are sold first.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of fully completed units for accounting purposes.

Labor

The human effort, either physical or mental, that is used in the production of goods and services.

Overhead

Indirect costs related to manufacturing or business operations that do not directly tie to a specific product or activity, such as utilities, rent, and management salaries.