Question

Identifying Accounts to be Closed From the list that follows, identify the accounts that should be closed to the owner’s capital account at the end of the fiscal year:
a. Accounts Receivable
b. Accumulated Depreciation
c. Building
d. Depreciation Expense
e. Fees Earned
f. Jackie Lindsay, Capital
g. Jackie Lindsay, Drawing
h. Land
i. Supplies
j. Supplies Expense
k. Unearned Rent
I. Wages Expense

Answer 1

Answer:

See explanation section

Explanation:

When we need to close accounts, we close the income and expenses accounts. The reason to close those accounts is that those are temporary accounts. Drawings and dividends are also temporary as those accounts have to be settled through capital and retained earnings balance. Therefore,

We will close the entries to income summary are -

D. Depreciation Expense

E. Fees Earned

J. Supplies Expense

L. Wages expense.

The entry to close against a capital account is Drawings. Therefore, Jackie Lindsay, Drawing should be closed.