At the time a firm adjusts Merchandise Inventory, the Income Summary account
A) contains two closing entries.
B) has no balance.
C) contains an adjusting entry for unearned revenue.
D) contains the last fiscal period's adjusting entry for Merchandise Inventory.
E) contains an adjusting entry for expired prepaid insurance.

Question

Quizplus · Accepted Answer

The Income Summary account has no balance at the time a firm adjusts Merchandise Inventory because all revenue and expense accounts have been closed into it.

At the Time a Firm Adjusts Merchandise Inventory, the Income