What Is the Closing Entry to Allocate Net Income $24,000

question 85

Multiple Choice

What is the closing entry to allocate net income $24,000 to Eric,Von,and Derek? Their respective capital balances are $20,000,$40,000,and $60,000.Net income is shared in a ratio of their capital balances.

• A)Debit Income Summary $24,000; credit Eric,Capital $4,000; credit Von,Capital $8,000; credit Derek,Capital $12,000
• B)Debit Income Summary $24,000; credit Eric,Capital $8,000; credit Von,Capital $8,000; credit Derek,Capital $8,000
• C)Debit Salary Expense $24,000; credit Salaries Payable $24,000
• D)Net income cannot be allocated.

Differentiate between current assets, non-current assets, current liabilities, and non-current liabilities.

Identify financial instruments not considered as cash equivalents.

Understand the reporting and classification of bank indebtedness.

Apply knowledge of cash equivalents and bank indebtedness to bank reconciliation processes.

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Definitions:

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Organized data that is easily searchable and programmed by information systems, typically found in databases or other formatted repositories.

IT Infrastructure

The combination of hardware, software, network components, and services essential for the creation, functioning, and administration of a corporate IT infrastructure.