Which of the Following Is the Correct Closing Entry for a Profit

question 9

Multiple Choice

Which of the following is the correct closing entry for a profit of $78 400?

• A) DR Profit or loss summary account $78 400; CR Owner's capital account $78 400
• B) DR Owner's capital account $78 400; CR Profit or loss summary account $78 400
• C) DR Owner's capital account $78 400; CR Bank $78 400
• D) No closing entry is required

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Definitions:

Process Cost Accounting

A method of accounting that accumulates and assigns costs to units of product in large quantities, where the products are indistinguishable from each other.

Separate Record

Maintaining independent records for different departments, entities, or operations within an organization for clarity and accountability.

Materials Requisitions

Requests for the supply of materials necessary for production or operational purposes within an organization.

Storeroom

A room or space used for the storage of goods or supplies, typically in a business or retail setting.