When Closing the Income Summary Account When There Is a Net

question 73

Multiple Choice

When closing the Income Summary account when there is a net income

• A) Capital would increase.
• B) Capital would decrease.
• C) Capital would remain the same.
• D) None of these are correct.

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded.

Equilibrium Price

The market price at which the supply of an item matches its demand, leading to a stable market where there is no surplus or shortage.

Adam Smith

An 18th-century Scottish economist and philosopher, often considered the father of modern economics, best known for his work "The Wealth of Nations" which promotes the idea of free markets and the invisible hand guiding economic activity.

Public Interest

The welfare or well-being of the general public; often used to justify government actions or policies intended to protect or benefit the population as a whole.