The Special Account Used Only in the Closing Process to Temporarily

question 34

Multiple Choice

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

• A) Contra account.
• B) Income Summary account.
• C) Nominal account.
• D) Closing account.
• E) Balance column account.

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Definitions:

Interest Rates

The percentage charged or paid for the use of money, typically by a bank or financial institution on loans or savings.

Economy

The collective system of production, consumption, and trade of goods and services within a particular area or country.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, highlighting the trade-offs involved.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid by the borrower to the lender for the use of their funds.