High Step Shoes Had Annual Revenues of $185,000,expenses of $103,700,and

question 182

Multiple Choice

High Step Shoes had annual revenues of $185,000,expenses of $103,700,and dividends of $18,000 during the current year.The retained earnings account before closing had a balance of $297,000.The entry to close the Income Summary account at the end of the year,after revenue and expense accounts have been closed,is:

• A)Debit Retained earnings $297,000; credit Income Summary $297,000
• B)Debit Retained earnings $63,300; credit Income Summary $63,300
• C)Debit Income Summary $63,300; credit Retained earnings $63,300
• D)Debit Income Summary $81,300,credit Retained earnings $81,300
• E)Debit Retained earnings $81,300; credit Income Summary $81,300

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Definitions:

Price Level

An index that measures the average relative level of prices of goods and services in an economy over a period of time.

Inflation

The speed at which the overall price level for goods and services increases, thereby diminishing the buying power.

Shoeleather Costs

The resources wasted when inflation encourages people to reduce their money holdings.

Money Holdings

The amount of cash or liquid assets that a person or entity possesses at any given time.