Question

In January, Hometown Ice Cream Shoppe reported the following balances in their income statement accounts. Based on this information, the closing entry to Retained Earnings will be?

Answer 1

Answer:

A) Debit of $1,445

Explanation:

Closing entries refers to the balance statements that are entered at the end of an accounting period in order to transfer the temporary account balances into permanent accounts. Based on the balances listed in the question it can be said that the closing entry to retained earnings will be Debit of $1,445. This refers to money going out of the account and can be calculated by adding all the revenue to the account and subtracting the expenses leaving $ - 1,445 thus being debit.