Question

The first two closing entries to the Income Summary account indicate a debit of $57,750 and a credit of $69,700. The third closing entry would be: Multiple Choice debit Income Summary $11,950; credit Drawing $11,950. debit Revenue $69,700; credit Expenses $57,750. debit Income Summary $11,950; credit Capital $11,950. debit Capital $11,950; credit Income Summary $11,950.

Answer 1

Answer:

The correct answer is C

Explanation:

Closing entry is defined as the journal entry which is passed or made the end of the accounting period or year, which involves shifting of the data from the temporary accounts on the income statement to the permanent accounts on the balance sheet of the company.

The third closing entry which is to be recorded is as:

Income Summary A/c................................Dr   $11,950

        Capital A/c................................................Cr  $11,950

Being the closing entry has been recorded

Working Note:

Amount = $69,700 - $57,750

= $11,950