Question

The Retained earnings account has a credit balance of $51,000 before closing entries are made. Total revenues for the period are $69,200, total expenses are $46,800, and dividends are $14,600. What is the correct closing entry for the revenue accounts?

Answer 1

Answer:

Debit the Service revenue account $69,200; Credit the income summary account $69,200.

Explanation:

Temporary accounts includes:

1) Revenue, income and gain accounts

2) Expense and loss accounts

3) Income summary account

4) Dividend, drawing or withdrawal account

In the given question, the closing entry only for revenue account is required. The correct entry will be Debit the Service revenue account $69,200; Credit the income summary account $69,200.