Use the Following Account Balances from the Adjusted Trial Balance

question 54

Multiple Choice

Use the following account balances from the adjusted trial balance of ABC Consulting:

Select the correct closing entry that ABC Consulting would make to close their expense account(s) at the end of the accounting period.

• A)debit Salary Expense $2,600; debit Rent Expense $3,000; debit Supplies Expense $1,900; debit Advertising Expense $800 and credit Income Summary $8,300.
• B)debit Income Summary $8,300 and credit B. Conway, Capital for $8,300.
• C)debit B. Conway, Capital $8,300 and credit Salary Expense $2,600; credit Rent Expense $3,000; credit Supplies Expense $1,900; Advertising Expense $800.
• D)debit Income Summary $8,300 and credit Salary Expense $2,600; credit Rent Expense $3,000; credit Supplies Expense $1,900; Advertising Expense $800.

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Definitions:

Adjusting Entry

An accounting record entry, created at the conclusion of an accounting cycle, that distributes earnings and expenses to their respective years.

Unearned Fees

Income received by a company for services to be provided in the future; recognized as a liability until the services are rendered.

Adjusting Entry

A financial record created at the conclusion of an accounting cycle to distribute income and costs to the timeframe in which they were genuinely incurred.

Office Equipment

Tangible assets such as computers, desks, and chairs, purchased for use in the conduct of business operations and not intended for resale.