Given the Following Accounts and Their Adjusted Balances Before Closing

question 20

Multiple Choice

Given the following accounts and their adjusted balances before closing entries are posted, what amount will be posted to Bessie Cool, Capital in the process of closing the Income Summary account? Assume all accounts have normal balances. $$\begin{array} { | l | r | } \hline \text { Bessie Cool, capital } & \$ 7,000 \\\hline \text { Bessie Cool, withdrawals } & 9,600 \\\hline \text { Service Revenue } & 35,500 \\\hline \text { Rent expense } & 3,600 \\\hline \text { Salaries expense } & 7,200 \\\hline \text { Insurarace expense } & 920 \\\hline \text { Depreciation experse, equip. } & 500 \\\hline \text { Accumulated depreciation, equipment. } & 1,500 \\\hline\end{array}$$

• A) $12,180 credit
• B) $21,780 debit
• C) $21,780 credit
• D) $23,280 credit
• E) $28,780 credit

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Definitions:

Risk Averse

An investor who will consider risky portfolios only if they provide compensation for risk via a risk premium.

Variable Annuity Contract

An insurance contract that provides future payments to the holder, where the amounts depend on the performance of the investment options chosen.

Hypothetical Constant-Benefit Payment

A theoretical payment scenario where beneficiaries receive a constant amount, regardless of changes in the underlying value or conditions.

Personal Trust

An interest in an asset held by a trustee for the benefit of another person.