After Posting the Second Closing Entry to the Income Summary

question 151

Multiple Choice

After posting the second closing entry to the income summary account, the balance will be equal to

• A) zero
• B) stockholders' equity
• C) revenues for the period
• D) the net income or net loss for the period

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Definitions:

Desired Rate of Return

The return a investor expects to achieve from an investment.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of investments.

Manufacturing Machinery

The equipment and machines used in the process of producing goods in manufacturing facilities.

Future Cash Flows

Estimates of future financial transactions that involve the inflow or outflow of money from a particular operation or investment.