Use the work sheet for Finley Company to answer the questions that follow.
The journal entry to close revenues would be
A) debit Income Summary, $155,000; credit Fees Earned, $155,000
B) debit Retained Earnings, $155,000; credit Fees Earned, $155,000
C) debit Fees Earned, $155,000; credit Income Summary, $155,000
D) credit Fees Earned, $155,000; credit Retained Earnings, $155,000

Question

Use the work sheet for Finley Company to answer the questions that follow. 
 The journal entry to close revenues would be
A) debit Income Summary, $155,000; credit Fees Earned, $155,000 
B) debit Retained Earnings, $155,000; credit Fees Earned, $155,000 
C) debit Fees Earned, $155,000; credit Income Summary, $155,000 
D) credit Fees Earned, $155,000; credit Retained Earnings, $155,000

Quizplus · Accepted Answer

To close revenues, the credit balance of Fees Earned account should be debited to Income Summary account while the opposite account, Income Summary, is credited. Thus, the correct journal entry is debit Fees Earned, $155,000; credit Income Summary, $155,000.

Use the Work Sheet for Finley Company to Answer the Questions