The First Two Closing Entries to the Income Summary Account

question 44

Multiple Choice

The first two closing entries to the Income Summary account indicate a debit of $53,000 and a credit of $64,000. The third closing entry would be:

• A)debit Capital $11,000; credit Income Summary $11,000.
• B)debit Revenue $64,000; credit Expenses $53,000.
• C)debit Income Summary $11,000; credit Drawing $11,000.
• D)debit Income Summary $11,000; credit Capital $11,000.

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Definitions:

Intangible Asset

An identifiable non-monetary asset without physical substance, such as patents, trademarks, and goodwill, that provides economic benefits.

Amortization

The process of spreading the cost of an intangible asset over its useful life.

Legal Life

The duration for which an entity, asset, or agreement is legally effective or recognized.

Patent

A legal right granted by a government authority that gives an inventor exclusive rights to make, use, or sell an invention for a specified time period.