The Following Information Is from the Income Statement of Ike's

question 100

Multiple Choice

The following information is from the Income Statement of Ike's Lawn Service for the quarter ending September 2022: The balance in Retained Earnings at July 1 was $3,200.Ike's distributed dividends of $2,200 during the period.Which of the following is not one of the closing entries that the company will make?

• A)Credit Income Summary for $4,500, Debit Retained Earnings for $4,500
• B)Debit Retained Earnings for $2,200, Credit Dividends for $2,200
• C)Debit Service Revenue $4,500, Credit Income Summary for $4,500
• D)Debit Income Summary for $2,000, Credit Retained Earnings for $2,000

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Definitions:

Duty of Accounting

An agent’s obligation to keep an accurate account of the transactions of money and property made on behalf of the principal.

Agent

A representative authorized to act on behalf of another person or organization, especially in business or legal matters.

Principal

The original amount of money invested or loaned, upon which interest is calculated, or the main party involved in a transaction.

Ratification

The official way to confirm something, usually by vote, making it valid or officially approved.