Rosewood Earned Revenues of $19,000 and Incurred Expenses of $4,500

question 1

Multiple Choice

Rosewood earned revenues of $19,000 and incurred expenses of $4,500.The owner made withdrawals of $2,500.What is the balance in the Income Summary account after closing net income or loss to the Owner,Capital account?

• A)debit balance of $19,000
• B)credit balance of $4,500
• C)credit balance of $14,500
• D)balance of $0

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Definitions:

Risk-Free Rate

The interest rate excluding all risk premiums. The risk-free rate consists of the pure rate and an inflation adjustment. It is approximated by the three-month treasury bill rate. Written as kRF.

Real Option

The value of additional decision-making opportunities available to an investor or company once an initial investment has been made.

Financial Results

The summary of a company's financial performance and position, typically reported on a quarterly and annual basis.

Risk-Adjusted Rates

In capital budgeting, a rate used in place of the cost of capital to reflect especially risky projects.