Question

In preparing closing entries A. each revenue account will be credited. B. each expense account will be credited. C. the owner’s capital account will be debited if there is net income for the period. D. the owner’s drawings account will be debited.

Answer 1

Explanation:

The closing entries for the following accounts are shown below:

1. Sales Revenue A/c Dr XXXXX

              To Income Summary XXXXX

(Being revenue account closed)

2. Income summary A/c Dr XXXXX

                 To Expenses A/c XXXXX

(Being expenses accounts are closed)

3. Income summary A/c Dr XXXXX

             To Owner capital XXXXX

(Being the difference is recorded)

4. Owner capital XXXXX

         To Owner Drawing XXXXX

(Being the drawing account is closed)