Hot Tamale Company Had $120,000 of Revenues and $125,000 of Expenses

question 117

Multiple Choice

Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. No dividends were paid. The second of the year-end closing entries should include which of the following line items?

• A) Credit Retained earnings $125,000.
• B) Debit Retained earnings $125,000.
• C) Debit Income summary $125,000.
• D) Credit Income summary $125,000.

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Definitions:

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Price Discrimination

A strategy in pricing where the same provider sells goods or services that are identical or nearly identical at varying prices in distinct markets.

Illegal

refers to activities or actions that are prohibited by law and punishable if violated.

Competition Elimination

The process or strategy of removing or reducing competitors in a market to gain greater market share, either through business practices, mergers, or acquisitions.