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

question 150

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 Dividends $33,000; credit Income Summary $33,000.
• B)Debit Income Summary $33,000; credit Dividends $33,000.
• C)Debit Income Summary $33,000; credit Retained earnings $33,000.
• D)Debit Retained earnings $33,000; credit Income Summary $33,000.
• E)Credit Retained earnings $33,000; debit Dividends $33,000.

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Definitions:

Average Collection Period

The typical timeframe a firm needs to gather payments from sales made on credit, showcasing how efficient its credit and collection procedures are.

Total Current Assets

The aggregate amount of all current assets on a company’s balance sheet, which are expected to be converted into cash within one fiscal year.

Receivable Turnover

A measure of how quickly a company collects cash from its accounts receivable, typically calculated as net credit sales divided by average accounts receivable.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency in managing and selling goods.