The Income Summary Account Is Used To

question 3

Multiple Choice

The Income Summary account is used to:

• A)Adjust and update asset and liability accounts.
• B)Close the revenue and expense accounts.
• C)Determine the appropriate dividend amount.
• D)Replace the income statement under certain circumstances.
• E)Replace the retained earnings account in some businesses.

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Definitions:

Economic Perspective

The viewpoint from which economic analysts assess and interpret the workings of economic systems and the behavior of economic agents.

Foreign Competition

The competition that domestic companies face from products and services produced in other countries.

Adam Smith

A Scottish economist and philosopher known as the father of modern economics, famous for his work "The Wealth of Nations."

David Ricardo

David Ricardo was a British political economist best known for his theories on comparative advantage, which describe how nations can benefit from trading.