The Fourth Step in the Closing Process Is to Close

question 62

Multiple Choice

The fourth step in the closing process is to close the _____________ account(s) into the ___________ account(s) .

• A) Income Summary, Capital
• B) Capital, Drawing
• C) Drawing, Capital
• D) Drawing, Income Summary

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market, resulting in no surplus or shortage.

Market Mechanism

Tendency in a free market for price to change until the market clears.

Federal Government

The national government of a federal state, which shares sovereignty with the constituent states or provinces and is typically responsible for national defense, foreign policy, and regulating inter-state commerce.

Equilibrium Price

The market price at which the quantity of a good demanded equals the quantity supplied, leading to market equilibrium.