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

Revenues are closed by debiting the revenue account and crediting the Income Summary account. Therefore, the correct journal entry to close revenues would be to debit Fees Earned for $155,000 and credit Income Summary for $155,000. Option A and B have incorrect debit entries, and option D has an incorrect credit entry.

Use the Work Sheet for Finley Company to Answer the Questions