Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?
A) debit Insurance Expense and credit Income Summary
B) debit Insurance Expense and credit Common Stock
C) debit Retained Earnings and credit Insurance Expense
D) debit Income Summary and credit Insurance Expense

Question

Quizplus · Accepted Answer

To close the Insurance Expense account at the end of the year, we need to transfer its balance to the Income Summary account, which then gets closed to Retained Earnings. The entry required for this purpose is to debit Income Summary and credit Insurance Expense. Therefore, option D is the correct choice. Options A, B, and C are not appropriate for this purpose.

Which of the Following Entries Will Be Necessary to Close