After Preparing and Posting the Closing Entries for Revenues and Expenses

question 3

Multiple Choice

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

• A) Debit Income Summary $33,000; credit Owner Capital $33,000.
• B) Debit Owner Capital $33,000; credit Income Summary $33,000.
• C) Debit Income Summary $33,000; credit Owner Withdrawals $33,000.
• D) Debit Owner Withdrawals $33,000; credit Income Summary $33,000.
• E) Credit Owner Capital $33,000; debit Owner Withdrawals $33,000.

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Definitions:

Price-Taker

An economic agent (e.g., a firm or consumer) that has no control over the market price and must accept prices as given.

Economic Profit

The surplus achieved when total revenue exceeds the opportunity costs of all resources used in production.

Monopolistically Competitive

A market structure characterized by many firms offering products that are similar but not identical, leading to competition based on factors other than price.

Advertising

The action of calling public attention to products, services, events, or concepts, usually through paid announcements by an identified sponsor.