If A's Share of Net Income Is $25,000 and B's

question 154

Multiple Choice

If A's share of net income is $25,000 and B's share of net income is $40,000,the closing entry would involve a:

• A) credit to A's capital account for $40,000
• B) credit to B's capital account for $25,000
• C) debit to A's capital account for $25,000
• D) debit to Income Summary for $65,000

Identify different types of operational expenses and their importance in company operations.

Understand the rights and responsibilities of buyers and sellers under different shipping terms.

Recognize the role and treatment of returned merchandise in sales and accounting systems.

Understand the components and presentation of proprietary fund financial statements.

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Definitions:

Pecuniary

Relating to or consisting of money.

Sales Commission

A fee paid to sales personnel, often calculated as a percentage of the sales they generate.

Income Tax

A tax imposed by a government on the financial income generated by individuals or entities within its jurisdiction.

Plant Capacity

The maximum level of output that a company can sustain to produce in a given period under normal conditions.