After Posting the Entries to Close All Revenue and Expense

question 30

True/False

After posting the entries to close all revenue and expense accounts, Hatfield Company's Income Summary account has a credit balance of $6,000, and the Hatfield, Withdrawals account has a debit balance of $2,500. These balances indicate that profit for the accounting period amounted to $3,500.

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Definitions:

Qualifying Relative

A dependent who does not meet the criteria to be a qualifying child but qualifies based on relationship, income, and support tests for tax purposes.

Earn

To receive money or another form of compensation in exchange for labor or services provided.

Tax Return Form

The document or electronic form used to report income, deduct expenses, and calculate taxes owed or refunded by the taxpayer.

Taxpayer

An individual or entity that is obligated to pay taxes to a federal, state, or local government body.