If the inventory account is updated during the closing entry process

If the inventory account is updated during the closing entry process

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1. If the inventory account is updated during the closing entry process, this closing entry  includes a credit equal to the beginning inventory balance ($37,000), which increases the  debit to income summary by a corresponding amount (to $1,068,500).
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Unformatted text preview: At this point, income summary has the same balance whether adjusting or closing entries are used to update inventory. If adjusting entries are used, four separate entries contribute to the income summary account's balance....
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