Use This Adjusted Trial Balance to Answer the Following Question

question 114

Multiple Choice

Use this adjusted trial balance to answer the following question. $\begin{array}{c}\text {Dan's Marina}\\\text {Adjusted Trial Balance}\\\text {December 31, 2010}\\\begin{array}{|l|r|r|}\hline \text { Cash } & \$ 2,500 \\\text { Accounts Receivable } & 3,500 \\\text { Supplies } & 1,500 \\\text { Prepaid Insurance } & 2,500 \\\text { Dock } & 12,000\\\text { Accumulated Depreciation-Dock } & & \$ 3,000 \\\text { Accounts Payable } && 6,000 \\\text { Common Stock } && 10,000 \\\text { Dividends } & 4,000 & \\\text { Boat Rentals } & & 17,000\\\text { Depreciation Expense-Dock } & 1,000 & \\\text { Wages Expense } & 6,500 & \\\text { Insurance Expense } & 2,000 & \\\text { Income Taxes Expense } & 500 \\ & \$ 36,000 & \$ 36,000 \\\hline\end{array}\end{array}$

The entry to close the expense accounts includes a

• A) debit to Retained Earnings for $2,000.
• B) debit to Income Summary for $10,000.
• C) debit to Insurance Expense for $2,000.
• D) credit to Retained Earnings for $10,000.

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Definitions:

Borrow

The act of receiving something of value in exchange for the promise to return it or its equivalent value at a later date.

Lend

The act of giving money or goods to someone with the expectation that it will be paid back in the future.

Consumption

The usage of resources or products for the purpose of satisfying human needs or wants.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.