After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:
A)Debit Dividends $33,000; credit Income Summary $33,000.
B)Debit Income Summary $33,000; credit Dividends $33,000.
C)Debit Income Summary $33,000; credit Retained Earnings $33,000.
D)Debit Retained Earnings $33,000; credit Income Summary $33,000.
E)Credit Retained Earnings $33,000; debit Dividends $33,000.

Question

Quizplus · Accepted Answer

The income summary account has a debit balance of $33,000, which means the company has earned a net income of $33,000. The entry to close the income summary account is to debit Retained Earnings $33,000 to transfer the net income into the Retained Earnings account and credit Income Summary $33,000 to zero out the balance in the income summary account.

After Preparing and Posting the Closing Entries for Revenues and Expenses