Use the following account balances from the adjusted trial balance of ABC Consulting:

Select the correct closing entry that ABC Consulting would make to close their expense account(s)at the end of the accounting period.
A)debit Salary Expense $2,600; debit Rent Expense $3,000; debit Supplies Expense $1,900; debit Advertising Expense $800 and credit Income Summary $8,300.
B)debit Income Summary $8,300 and credit B. Conway, Capital for $8,300.
C)debit B. Conway, Capital $8,300 and credit Salary Expense $2,600; credit Rent Expense $3,000; credit Supplies Expense $1,900; Advertising Expense $800.
D)debit Income Summary $8,300 and credit Salary Expense $2,600; credit Rent Expense $3,000; credit Supplies Expense $1,900; Advertising Expense $800.

Question

Use the following account balances from the adjusted trial balance of ABC Consulting:

Select the correct closing entry that ABC Consulting would make to close their expense account(s)at the end of the accounting period.
A)debit Salary Expense $2,600; debit Rent Expense $3,000; debit Supplies Expense $1,900; debit Advertising Expense $800 and credit Income Summary $8,300. 
B)debit Income Summary $8,300 and credit B. Conway, Capital for $8,300. 
C)debit B. Conway, Capital $8,300 and credit Salary Expense $2,600; credit Rent Expense $3,000; credit Supplies Expense $1,900; Advertising Expense $800. 
D)debit Income Summary $8,300 and credit Salary Expense $2,600; credit Rent Expense $3,000; credit Supplies Expense $1,900; Advertising Expense $800.

Quizplus · Accepted Answer

The correct closing entry to close expense accounts would be to debit Income Summary for the total amount of expenses ($8,300) and credit each individual expense account (Salary Expense, Rent Expense, Supplies Expense, and Advertising Expense) for their respective amounts. This transfers the total expenses to the Income Summary account in preparation for calculating net income/loss.

Use the Following Account Balances from the Adjusted Trial Balance