Use This Information from the Income Statement Columns of the Work

question 46

Multiple Choice

Use this information from the Income Statement columns of the work sheet of Corner Laundry Service to answer the following question.
$\begin{array} { | l | r | r | } \hline & { \text { Income Statement } } \\\hline & \text { Debit } & \text { Credit } \\\hline \text { Laundry Revenue } & & 2,500 \\\hline \text { Wages Expense } & 750 & \\\hline \text { Rent Expense } & 500 & \\\hline \text { Supplies Expense } & 300 & \\\hline \text { Insurance Expense } & 200 & \\\hline \text { Income Taxes Expense } & 50 & \\\hline\\\text { Net Income } & 1,800 & 2,500 \\& 700 & \\\hline&2,500&2,500\\\hline\end{array}$
The entry to close the expense accounts includes a

• A)\(\begin{array} { l l }
• \text { All Expenses } & 1,800 \\
• \text { Retained Earnings } & 1,800
• \end{array}\)
• B)All Expenses\(\quad\)\(\quad\)1,800
• Income Summary\(\quad\)\(\quad\)1,800
• C)Income Summary\(\quad\)\(\quad\)1,800
• All Expenses\(\quad\)\(\quad\)1,800
• D)\(\begin{array} { l l l }
• \text { Retained Earnings } & 1,800 \\
• \text { All Expenses } & & 1,800
• \end{array}\)

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Definitions:

Reduced Turnover

A decrease in the rate at which employees leave a company voluntarily and need to be replaced, often resulting from improved job satisfaction and work conditions.

Social Security System

A government program designed to provide financial support to individuals during retirement, disability, or unemployment.

Employee Retirement Income Security Act (ERISA)

A federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

Mandated Benefit

Benefits that employers are required by law to provide to their employees, such as social security, unemployment, and workers' compensation.