The Income Summary Account Is Used

question 92

Multiple Choice

The Income Summary account is used

• A) To adjust and update asset accounts
• B) To close the revenue and expense accounts
• C) To determine the appropriate withdrawal amount
• D) To replace the income statement under certain circumstances
• E) To replace the capital account in some businesses

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Definitions:

Net Operating Income

Represents the total profit of a business after operating expenses are subtracted from gross profit.

Personnel Expenses

Costs associated with the compensation and benefits of a company's employees, including wages, salaries, bonuses, and benefits.

Planning Budget

A budget created for a specific level of activity that is used for planning and coordinating operations.

Budgeting

The process of creating a plan to spend your money, outlining anticipated income and expenses over a certain period.