When the Balance of the Income Summary Account Is a Debit

question 81

Multiple Choice

When the balance of the Income Summary account is a debit, the entry to close this account is

• A) debit Capital; credit Income Summary.
• B) debit Income Summary; credit Revenue.
• C) debit Revenue; credit Income Summary.
• D) debit Income Summary; credit Capital.

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Definitions:

Raw Materials

The basic substances or components that are processed or combined to manufacture finished goods.

Journalize

The process of recording financial transactions in a company’s accounting records, or journal, in chronological order.

Units

A measurement of quantity, such as items, hours, or other measures, used in the organization or operation of businesses.

Direct Labor

The wages and benefits paid to employees who are directly involved in the production process of a company's products or services.