After preparing and posting the closing entries for revenues and expenses,the income summary account has a debit balance of $33,000.The entry to close the income summary account will be:
A)Debit Dividends $33,000; credit Income Summary $33,000.
B)Debit Income Summary $33,000; credit Dividends $33,000.
C)Debit Income Summary $33,000; credit Retained earnings $33,000.
D)Debit Retained earnings $33,000; credit Income Summary $33,000.
E)Credit Retained earnings $33,000; debit Dividends $33,000.

Question

Quizplus · Accepted Answer

The income summary account has a debit balance of $33,000, which means that expenses exceed revenues. To close the income summary account, the debit balance should be transferred to the retained earnings account. Therefore, the entry should be a debit to retained earnings for $33,000 and a credit to income summary for $33,000. Option D is the correct entry.

After Preparing and Posting the Closing Entries for Revenues and Expenses,the