Accounting 1 4.05

The Sales account has a balance of $4,500. To close the Sales account:

• debit Income Summary, $4,500; credit Sales, $4,500

• debit Owner's Equity, $4,500; credit Sales, $4,500

• debit Sales, $4,500; credit Income Summary, $4,500

• debit Sales, $4,500; credit Owner's Equity $4,500

The sales account has a balance of $3,875. To close the Sales account:

• debit Sales, $3,875; credit Income Summary, $3,875

• debit Income Summary, $3,875; credit Sales, $3,875

• debit Sales, $3,875; credit Owner's Equity, $3,875

• debit Owner's Equity, $3,875; credit Sales, $3,875

Mary is closing the Income Summary account. Her company had a net loss of $2,000. The correct journal entry is:

• debit Drawing, $2,000; credit Income Summary, $2,000

• debit Owner's Equity, $2,000; credit Income Summary, $2,000

• debit Sales, $2,000; credit Income Summary, $2,000

• debit Income Summary, $2,000; credit Owner's Equity, $2,000

The Drawing account has a balance of $900. The correct entry to close the Drawing account would be to:

• debit Drawing, $900; credit Income Summary, $900

• debit Drawing, $900; credit Owner's Equity, $900

• debit Income Summary, $900; credit Drawing, $900

• debit Owner's Equity, $900; credit Drawing $900

When closing the Advertising Expense account:

• debit Owner's Equity and credit Advertising Expense

• debit Advertising Expense and credit Income Summary

• debit Income Summary and credit Advertising Expense

• debit Advertising Expense and credit Owner's Equity

The correct closing entry for Advertising Expense account is to:

• debit Advertising Expense, $450.00; credit Amos Maxwell, Capital, $450.00

• debit Advertising Expense, $450.00; credit Income Summary, $450.00

• debit Amos Maxwell, Capital, $450.00; credit Advertising Expense, $450.00

• debit Income Summary, $450.00; credit Advertising Expense, $450.00

James is closing the Income Summary account. His company had a net income of $900. The correct journal entry is:

• debit Owner's Equity, $900; credit Income Summary, $900

• debit Income Summary, $900; credit Drawing, $900

• debit Sales, $900; credit Income Summary, $900

• debit Income Summary, $900; credit Owner's Equity, $900

The correct way to close the Miscellaneous Expense account is:

• debit Owner's Equity and credit Miscellaneous Expense

• debit Miscellaneous Expense and credit Owner's Equity

• debit Miscellaneous Expense and credit Income Summary

• debit Income Summary and credit Miscellaneous Expense

The owner's Drawing account has a balance of $275. The correct entry to close the Drawing account would be to:

• debit Income Summary, $275; credit Drawing, $275

• debit Drawing, $275; credit Income Summary, $275

• debit Owner's Equity, $275; credit Drawing, $275

• debit Drawing, $275; credit Owner's Equity, $275

Rachel is preparing the closing entries for her company. She has closed all the income statement accounts that have a debit balance. What is the NEXT step that she will perform?

• Journalize an entry to transfer net income or net loss to the owner's capital account and close the income summary account

• Journalize an entry to close the owner's drawing account

• Journalize an entry to close the income statement accounts that have debit balance

• Journalize an entry to close income statement accounts that have credit balances