To close the Fees Earned account,
A) debit Income Summary; credit Fees Earned.
B) debit Fees Earned; credit Capital.
C) debit Fees Earned; credit Income Summary.
D) debit Capital; credit Fees Earned.

Question

Quizplus · Accepted Answer

The Fees Earned account is a revenue account and needs to be closed at the end of the accounting period. To close it, we need to transfer the balance to the Income Summary account. This is done by debiting Fees Earned (to decrease it) and crediting Income Summary (to increase it). Once the Income Summary account is properly balanced, its balance can then be transferred to the owner's equity account(s).

To Close the Fees Earned Account