The journal entry required to close the Drawing account is debit to Income Summary account and a credit to Drawing account.
Option a) is correct.
<h2>What is Income Summary account ?</h2>
An income summary is a temporary account that is used to net the closing entries from all the revenue and expense accounts at the conclusion of the accounting quarter. The final balance is regarded as a gain or loss. The company made a profit for that year if the net balance of the income summary is a credit balance, and a loss for that year if the net balance is a debit balance.
It lists all earnings and costs related to both operational and non-operating operations. It is also known as a revenue and expense summary as a result.
Learn more about Income summary Accounts here:
brainly.com/question/21851842
#SPJ4
Answer: Direct and indirect statement of cash flows
Explanation: statement of cash flows shows the overall computed inflow and outflow of cash that took place in an organization over a given period of time. It shows how well an organization managed it's cash which is used to settle it's debts and make profit.
The direct method only considers the cash inflow and outflow into account and produces the cash flow from it's operations.
The indirect method considers the net income as the starting point and prepare the inflow and outflow using adjustments.
Expenses likely to be classified as prepaid expense (asset) are Prepaid Rent & Insurance Premiums. Enter a prepaid rent payment on the balance sheet as an asset until the month when the company is actually using the facility to which the rent relates, and then charge it to expense. Any insurance premium costs that have not expired as of the balance sheet date should be reported as a current asset such as Prepaid Insurance.
