After Preparing and Posting the Closing Entries for Revenues and Expenses

question 107

Multiple Choice

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

• A)Debit Dividends $33,000; credit Income Summary $33,000.
• B)Debit Income Summary $33,000; credit Dividends $33,000.
• C)Debit Income Summary $33,000; credit Retained Earnings $33,000.
• D)Debit Retained Earnings $33,000; credit Income Summary $33,000.
• E)Credit Retained Earnings $33,000; debit Dividends $33,000.

---

Definitions:

Explicit Costs

Explicit costs are direct, out-of-pocket payments for expenses like wages, rental fees, and materials, clearly identifiable and recorded in a company's financial statements.

Perfect Competition

A theoretical market structure characterized by a complete absence of rivalry among the sellers and perfect knowledge among buyers and sellers, with the product being homogeneous.

Price Makers

Entities that have the ability to influence the price of goods and services in the market due to lack of competition or unique product offerings.

Identical Products

Goods that are exactly the same in quality, function, and design, often produced in large quantities.