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 Owner,Capital
C)debit Owner,Capital and credit Insurance Expense
D)debit Income Summary and credit Insurance Expense

Question

Quizplus · Accepted Answer

The Insurance Expense account is a temporary account that needs to be closed at the end of the year to transfer its balance to the Owner's Equity section. To do this, we need to debit the Income Summary account (which is used to summarize all the revenues and expenses for the year) and credit the Insurance Expense account for the balance. Therefore, the correct entry is to debit Income Summary and credit Insurance Expense.

Which of the Following Entries Will Be Necessary to Close