After Preparing and Posting the Closing Entries to Close Revenues

question 16

Multiple Choice

After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses) , the income summary account has a debit balance of $33,000. The entry to close the income summary account will include:

• A) a debit of $33,000 to owner withdrawals.
• B) a credit of $33,000 to owner withdrawals.
• C) a debit of $33,000 to income summary.
• D) a debit of $33,000 to owner capital.
• E) a credit of $33,000 to owner capital.

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Definitions:

Bank Debit Memo

A notice from a bank reducing a customer's account balance due to charges like fees or corrections.

NSF Check

A check that cannot be processed due to insufficient funds in the account it's drawn on.

Petty Cash Fund

A small amount of cash kept on hand for minor, incidental expenses of a business.

Journal Entries

Records of financial transactions in the accounting system, ensuring every movement of funds is documented.