The Entry to Close Expense Accounts Involves

question 1

Multiple Choice

The entry to close expense accounts involves

• A)a credit to Income Summary and debits to all the revenue accounts.
• B)debits to all the revenue accounts and a credit to Income Summary.
• C)credits to all the expense accounts and a debit to Income Summary.
• D)a debit to Retained Earnings and a credit to Income Summary.
• E)a debit to Income Summary and a credit to Retained Earnings.

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Definitions:

Bond Issue

The process by which a corporation or government raises funds by selling bonds to investors.

Effective Interest Method

A technique used in accounting to allocate the interest expense or income of a bond over its lifetime based on the bond's carrying amount at each interest period.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.