The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: $\begin{array}{lr}\text { Revenues }&&\$7,000\
\text { Expenses: }\\text { Salaries and Wages Expense } & \$ 3,000 \
\text { Rent Expense } & 1,500 \
\text { Advertising Expense } & 800 \
\text { Supplies Expense } & 300 \
\text { Insurance Expense } & 100\
\text { Total expenses }&&5,700\
\text { Net income }&&\$1,300
\end{array}$ After the revenue and expense accounts have been closed, the balance in Income Summary will be
A) $0.
B) a debit balance of $1,300.
C) a credit balance of $1,300.
D) a credit balance of $7,000.

Question

Quizplus · Accepted Answer

The revenue and expense accounts are closed to Income Summary. The total revenues are $7,000 and the total expenses are $5,700. The difference between these two amounts is the net income, which is $1,300. Therefore, the balance in Income Summary will be a credit balance of $1,300.

The Income Statement for the Month of June, 2015 of Camera