After Preparing and Posting the Closing Entries for Revenues and Expenses,the

question 20

Multiple Choice

After preparing and posting the closing entries for revenues and expenses,the income summary account has a debit balance of $33,000.The entry to close the income summary account will be:

• A)Debit Owner Withdrawals $33,000;credit Income Summary$33,000.
• B)Debit Income Summary $33,000;credit Owner Withdrawals $33,000.
• C)Debit Income Summary$33,000;credit Owner Capital $33,000.
• D)Debit Owner Capital $33,000;credit Income Summary $33,000.
• E)Credit Owner Capital $33,000;debit Owner Withdrawals $33,000.

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Definitions:

Spot Rate

The current market price at which a particular asset, such as foreign currency, can be bought or sold for immediate delivery.

Exchange Rates

How much one currency is worth in terms of another during conversion.

Liability Record

Liability Record is a documentation or entry that reflects the obligations or debts of a company that are due to be paid to others.

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified price on a future date.