Use the following worksheet to answer the following questions. The journal entry to close revenues would be:
A) debit Income Summary $155,000, credit Fees Earned $155,000
B) debit C. Finley, Capital $155,000, credit Fees Earned $155,000
C) debit Fees Earned $155,000; credit Income Summary $155,000
D) credit Fees Earned $155,000; credit C. Finley, Capital $155,000

Question

Use the following worksheet to answer the following questions.  The journal entry to close revenues would be:
A) debit Income Summary $155,000, credit Fees Earned $155,000 
B) debit C. Finley, Capital $155,000, credit Fees Earned $155,000 
C) debit Fees Earned $155,000; credit Income Summary $155,000 
D) credit Fees Earned $155,000; credit C. Finley, Capital $155,000

Quizplus · Accepted Answer

The closing entry for revenues is to debit the revenue account (Fees Earned in this case) and credit the Income Summary account for the same amount. This transfers the balance of the revenue account to the Income Summary account. Therefore, the correct journal entry to close revenues would be debit Fees Earned $155,000; credit Income Summary $155,000. Option A is incorrect because it has the debit and credit accounts reversed. Option B is incorrect because it is closing revenue directly to the owner's capital account. Option D is incorrect because it credits the revenue account instead of debiting it.

Use the Following Worksheet to Answer the Following Questions