The Entry to Close the Withdrawal Account Was Entered in Reverse-The

question 48

Multiple Choice

The entry to close the Withdrawal account was entered in reverse-the Withdrawal account was debited and Capital credited. The result of this error is that:

• A) before closing it, Income Summary will have a credit balance.
• B) before closing it, Income Summary will have a debit balance.
• C) the end of period capital will be understated.
• D) the end of period capital will be overstated.

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Definitions:

Shift Outward

An economic term referring to the expansion of a production possibility frontier, indicating an increase in an economy's capacity to produce.

Budget Lines

Graphical representations of all possible combinations of two goods that a consumer can afford given their income and the prices of the goods.

Indifference Curves

Graphical representations in microeconomics showing different bundles of goods between which a consumer is indifferent.

Linear

A relationship or function that can be graphically represented in two dimensions by a straight line.