Mathematics

Question

During the closing process, which of the following would likely occur?



Debit Revenue and Credit Income Summary


Debit Cash and Credit Income Summary


Debit Earned Income and Credit Income Summary


Debit Assets and Credit Income Summary

pls help i need to know soon

1 Answer

  • Answer:

    The correct answer is A. Debit Revenue and Credit Income Summary

    Step-by-step explanation:

    Let's recall that at the end of the accounting year, closing entries transfer the balances from the temporary accounts to a permanent account with the purpose that those temporary accounts will begin the next accounting year with zero balances.

    However, an intermediate account called Income summary is created and used in the closing stage of the accounting year to register all income and expense balances and determine the net result for the period (income or loss).

    Upon saying that, usually revenue accounts have a credit balance.  To make it zero we want to decrease the balance.  We will debit the revenue account and credit the Income Summary account.  This credit to income summary should be exactly the total revenue from the income statement.

    The correct answer is A. Debit Revenue and Credit Income Summary

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