Use this end-of-period spreadsheet to answer the questions that follow.

-The journal entry to close revenues would be:
A) debit Income Summary, $155,000; credit Fees Earned, $155,000
B) debit Common Stock, $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 Common Stock, $155,000

Question

Use this end-of-period spreadsheet to answer the questions that follow.
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-The journal entry to close revenues would be:
A) debit Income Summary, $155,000; credit Fees Earned, $155,000 
B) debit Common Stock, $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 Common Stock, $155,000

Quizplus · Accepted Answer

The journal entry to close revenues is to debit Fees Earned for the total amount earned during the period ($155,000) and credit Income Summary for the same amount, since Income Summary is used to summarize all revenue and expense accounts before transferring their balances to Retained Earnings. Option A incorrectly debits Income Summary instead of Fees Earned, and Option B incorrectly credits Common Stock instead of Income Summary. Option D incorrectly credits Fees Earned instead of debiting it.

Use This End-Of-Period Spreadsheet to Answer the Questions That Follow