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:

Common Shareholders

Individuals or entities that own a portion of a company's equity through its common shares, giving them voting rights and a claim on a portion of its profits.

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of the company's total net income.

Current Dividends

Dividends that are declared and paid to shareholders out of a company's current earnings or accumulated profits.

Future Dividends

Expected payments made by a corporation to its shareholder members based on future earnings, typically projected by the company’s management or analysts.