When Closing the Income Summary Account When There Is a Net

question 117

Multiple Choice

When closing the Income Summary account when there is a net loss,

• 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:

Financial Accountability

The obligation of individuals or organizations to explain how their money was spent and to demonstrate that they have used resources efficiently and effectively.

Legal Auditing

A comprehensive review and assessment of an organization’s adherence to legal requirements and regulations.

Legal Disputes

Conflicts that involve a disagreement over the interpretation or enforcement of laws, often resolved in court or through legal processes.

Business Cycles

The fluctuations in economic activity that an economy experiences over a period of time, characterized by expansion and contraction phases.