The entry to close the expense account(s) was entered in reverse-Income Summary was credited and the expense account(s) was/were debited. The result of this error is that
A) before closing it, Income Summary will have a credit balance.
B) before closing it, Income Summary will have a debit balance.
C) the assets will be overstated.
D) the liabilities will be overstated.

Question

Quizplus · Accepted Answer

By crediting the Income Summary and debiting the expense accounts, the expenses are essentially being added back to the company's income, resulting in a higher income summary balance before it is closed. This does not directly affect the reported assets or liabilities on the balance sheet.

The Entry to Close the Expense Account(s) Was Entered in Reverse-Income