Use the Following Account Balances from the Adjusted Trial Balance

question 78

Multiple Choice

Use the following account balances from the adjusted trial balance columns of RB Auto's
Worksheet to answer below question.

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Select the closing entry that RB Auto would make at the end of the accounting period to close their revenue accounts and income statement accounts with credit balances.

• A)debit Income Summary for $15,000 and credit Sales for $15,000.
• B)debit Sales for $15,000; debit R Holloway, Capital for $13,000 and credit Income Summary For $28,000.
• C)debit Sales $15,000; debit Purchase Returns and Allowances $200 and credit Income Summary for $15,200.
• D)debit Sales and credit Income Summary for $15,000.

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Definitions:

Limited Liability Corporation

An organizational form that integrates the single-level taxation characteristic of partnerships and sole proprietorships with the protective limited liability feature of corporations.

Debt Financing

Acquiring funds for business activities by borrowing money, typically through loans or by issuing bonds, that must be repaid with interest.

Entrepreneurial Start-Up

A newly founded company with innovative business ideas aimed at addressing unmet market needs or offering new solutions.

Equity Financing

The method of raising capital by selling company shares to investors; in return, investors receive ownership interests in the company.