At the End of the Accounting Period,but Before Closing Entries

question 42

Multiple Choice

At the end of the accounting period,but before closing entries are made,Harry,the proprietor of Harry's Bar and Grill,has a debit balance of $24,500 in his drawing account and a credit balance of $72,300 in his capital account.Which of the following statements is true?

• A)Harry's net income was $47,800.
• B)Harry will debit the drawing account for $24,500 and credit the capital account for $24,500.
• C)Harry will debit the capital account for $24,500 and credit the drawings account for $24,500.
• D)Harry's retained earnings account was $47,800.

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Definitions:

Service Department

A division within a company that provides support services to other departments or divisions, rather than producing goods or services for external customers.

Investment Center Managers

Executives responsible for a business unit or division's operations and financial results, including revenue, expenses, and invested capital.

Performance Measures

Metrics used to assess and track the efficiency, effectiveness, and productivity of an organization or its employees.

Income and Capital

Refers to the two primary ways wealth is generated: income through earnings like wages and investments, and capital through appreciating assets like real estate or stocks.