If a Business Has a Net Loss for a Fiscal

question 31

Multiple Choice

If a business has a net loss for a fiscal period,the journal entry to close the Income Summary account is

• A) a debit to Income Summary and a credit to Fees Income.
• B) a debit to Income Summary and a credit to Capital.
• C) a debit to Capital and a credit to Income Summary.
• D) a debit to Capital and a credit to Drawing.

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Definitions:

Marginal Product

The additional output resulting from the use of one more unit of a production input, holding all other inputs constant.

Production Function

An economic model that describes the relationship between the inputs a firm uses and the output it creates.

Competitive

Relates to a market situation where multiple sellers are trying to appeal to the same customers, often leading to innovation and better prices.

Labor Market

An economic marketplace that matches potential employers with employees based on their skills, job requirements, and wage expectations.