ttt 16. Which of the following journal entries is required to close the Income Summary account of a profitable company? a. Debit Income Summary, credit Retained Earnings. < b. Credit Income Summary, debit Retained Earnings. < c. Debit Income Summary, credit Revenue. < d. Credit Income Summary, debit Common Stock. < AACSB: Analytic, AICPA BB: None, AICPA FN: Measurement, AICPA PC: problem solving 21. The periodicity assumption states < a. the business will remain in operation for the foreseeable future. < b. the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. < c. every economic entity can be separately identified and accounted for. < d. only those things that can be expressed in money are included in the accounting records. < AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting 22. The historical cost principle requires that when assets are acquired, they be recorded at < a. market value. < b. the amount paid for them. < c. selling price. < d. list price. < AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA