Question

The income statement for the year 2018 of Fugazi Co. contains the following information: Revenues $70000 Expenses: Salaries and Wages Expense $45000 Rent Expense 12000 Advertising Expense 10000 Supplies Expense 6000 Utilities Expense 2500 Insurance Expense 2000 Total expenses 77500 Net income (loss) $ (7500) After the revenue and expense accounts have been closed, the balance in Income Summary will be Entry field with incorrect answer a credit balance of $7500. a credit balance of $70000. $0. a debit balance of $7500.

Answer 1

Answer:

Explanation:

incorrect answer

a credit balance of $7500

correct answer

a debit balance of $7500.

Answer 2

Answer:

a credit balance of $7500

Explanation:

The income summary is where the elements of the income statement are closed. Revenue account is closed by crediting the income summary and debiting revenue. For expenses, credit expense and debit income summary.

For net loss, credit net loss and debit income summary. Where a profit or income was made, credit income summary and debit net income.

Hence the incorrect entry here is credit balance of $7500.