77.The income statement for the month of June, 2012 of Camera Obscura Enterprises contains the following information: The entry to close the Income Summary account would include a: A) debit to M. Smuts Capital, $6,000. True False 15. 26) M. Smuts showed a net income of $6,000. All expenses are closed … At this point, you have closed the revenue and expense accounts into income summary. B. the Depreciation Expense account and a credit to the Accumulated Depreciation account. Income Summary is a temporary account in which all the closing entries of revenue and expenses accounts are netted at the end of the accounting period, and the resulting balance is considered as profit or loss. Close Income Summary to Retained Earnings. Let us discuss how to do the latter. 18. How to Close an Account into Income Summary Account. Close the expense accounts to Income Summary. B) credit to M. Smuts Capital, $6,000. Net income $1,800 The entry to close the expense accounts includes a a. debit to Income Summary for $1,800. The entry to close the expenses accounts includes a * Debit to income summary $12,900. After the revenue and expense accounts have been closed, the balance in Income Summary will be . Income summary account is a temporary account used in the closing stage of the accounting cycle to compile all income and expense balances and determine net income or net loss for the period. 1. D. none of the above. D) a debit to Income Summary and a credit to the owner's drawing account. A. the Income Summary account and a credit to the Accumulated Depreciation account. answered May 11, 2016 by Ronaldo . To close income summary, debit the account for $61 and credit the owner's capital account for the same amount. The content of the income … The entry to close the Income Summary account would include a: A. credit to Cash, $6,500. Close the revenue accounts with credit balances. Processing of closing entries occurs after the end of the company's accounting period. The journal entry to close expense accounts includes A) debiting the expense accounts and crediting Income Summary. a. The balance in income summary now represents $37,100 credit – $28,010 debit or $9,090 credit balance…does that number seem familiar? Credit to income summary $35,300. B) Journal entry to close all expense accounts for the period. credit to Common Stock for $2,950. At the end of the reporting period, the credit accounts (i.e. To do this, their balances are emptied into the income summary account. Solution for J. Oros showed a net income of $6,500. In partnerships, a compound entry transfers each partner's share of net income or loss to their own capital account. D) debiting the expense accounts and crediting the drawing account. C. the Accumulated Depreciation account and a credit to the Income Summary account. All expense and revenue accounts now show a zero balance, and the income summary has a credit balance of $44,000. The journal entry to close the Fees Earned, $750, and Rent Revenue, $175, accounts during the year-end closing process would be: A) Dec. 31 Fees Earned 750 Rent Revenue 175 Income Summary 925 B) Dec. 31 Income Summary 925 Fees Earned 750 Rent Revenue 175 C) Dec. 31 Revenues 925 Income Summary 925 D) Dec. 31 Income Summary 925 Revenues 925 The entry to close the revenue accounts includes a * Debit to income summary $32,300. C) debiting the expense accounts and crediting the owner's capital account. Let’s explore each entry in more detail using Printing Plus’s information from Analyzing and Recording Transactions and The Adjustment Process as our example. This is the only time that the income summary account is used. true: To close a revenue account, debit it for the amount of its credit balance. We will prepare the closing entries for Hanlon. The closing journal entries associated with these steps are demonstrated below. b. a credit to Rent Expense for $1,000, c. a credit to Income Summary for $3,600. accounting-and-taxation ; 0 Answers. Close the revenue accounts to Income Summary. To do this, we will do the opposite of the balance in the adjusted trial balance in a journal entry and use Income Summary to balance the entry. true : The Income Summary account is located in the owner's equity section of the general ledger. debit to Retained Earnings for $2,950. false: Closing the revenue account is the second closing entry. Close the Income Summary account by either debiting it or crediting it, depending on the balance it contains. Solution for Oros showed a net income of $6,500. b. credit to Rent Expense for $1,000. For the rest of the year, the income summary account maintains a zero balance. Income Summary. In the closing stage, balances in all income accounts are transferred to the income summary account … Close Dividends to Retained Earnings. When the balance of the Income Summary account is a credit, the entry to close this account is: asked May 11, 2016 in Business by illedehomme A) debit Withdrawals; credit Income Summary. All revenue accounts are closed together in a single entry, while all expense accounts are closed in the second entry. C) Close Income Summary Closing entries are used in accounting to transfer the results of business operations, originally accounted for in temporary revenue and expense accounts, into permanent equity accounts. The fourth entry closes the Dividends account to Retained Earnings. Next, the balance resulting from the closing entries will be moved to Retained Earnings (if a corporation) or the owner's capital account (if a sole proprietorship). The entry to close the Income Summary account would include a: A. credit to Cash, $6,500. Step 3: Close Income Summary account. M. Smuts showed a net income of $5,000. In addition, the income summary closing entry tells us the company’s profit for the year. 0 votes. false: The Income Summary account is a simple income statement in the ledger. The information needed to prepare closing entries comes from the adjusted trial balance. When closing the accounts in the income statement, accountants can choose to close them directly and transfer the values to the retained earnings account or transition them to the income summary account before finally transferring them to the retained earnings account. b. a debit balance of $3,400. d. a debit to Wages Expense for $2,000. This is done through a journal entry debiting all revenue accounts and crediting income summary. The entry to close the Income Summary includes a: credit to Income Summary for $2,950. This is becaues temporary or nominal accounts, (also called income statement accounts), are measured periodically; and so, the amounts in one accounting period should be closed or brought to zero so that they won't get mixed with those of the next period. C) debit to Income Summary, $6,000. The net balance of the income summary account is closed to the retained earnings account.. It should — income summary should match net income from the income statement. B. debit to … Debit to Revenues for $37,100. Revised Summer 2016 Chapter Review Page 12 of 20 Multiple Choice Questions 1. That is, each entry is the sum of all the general ledger entries on the account in the fiscal year. Next, the same process is performed for expenses. Remember to close means to make the balance zero. expense accounts) are closed by making a credit entry for the balance in the general ledger. a. a debit to Income Summary for $3,400. When expense accounts are closed, the Income Summary account is credited. sales accounts) are closed by making a debit entry for the balance, and the debit accounts (i.e. false: If a business reports a net loss for the period, the journal entry to close the Income Summary account would be a debit to capital and a credit to Income Summary. The balance for the revenue is recorded in the income summary for the company, since revenue is one of the parts of income calculation. Closing entry 3: The income summary account's $61 credit balance equals the company's net income for the month of April. You must do the opposite of where the balance is. d. debit to Wages Expense for $3,000. Closing an expense account means transferring its debit balance to the Income Summary account.The Journal entry to close an expense account, therefore, consists of a credit to the expense account in an amount equal to its debit balance, with an offsetting debit to the Income Summary: Closing Income Summary Account. C) debit to Income Summary, $5,000. Step 1 – Record the Revenue to Income Summary Closing Entry The revenue account shows the company’s total review for the accounting period. During this closing process, a new temporary account, called income summary, is created to transfer the income and expense account balances. B. debit to … B) a debit to Income Summary and a credit to Cash. c. credit to Income Summary for $5,200. The entry to close the Income Summary account would include a: asked May 11, 2016 in Business by GipsyKing. I don't understand how closing contra asset accounts works. Journalize the closing entries: A) Journal entry to Close revenues. The third entry closes the Income Summary account to Retained Earnings. B) credit to M. Smuts Capital, $5,000. true: The last step in the accounting cycle is the preparation of the post-closing trial balance. For example, if the Income Summary account has a $10,000 debit balance, you must credit this account for that amount. c. a credit balance of $3,400. All temporary accounts must be reset to zero at the end of the accounting period. The following information is from the Income Statement of the Dirt Poor Laundry Service: Revenues Laundry Service Revenues $5,500. D) Both B and C are correct. Closing entries transfer the net income or net loss to the withdrawals account. Expenses Wages expense $1,450 Advertising expense … Credit to Revenues for $28,300. The Income Summary is very temporary since it has a zero balance throughout the year until the year-end closing entries are made. C) a debit to Cash and a credit to Income Summary. $0. If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a _____. debit to Income Summary for $2,950. The entry to close Prepaid insurance includes a credit to that account. Here are some example closing entries. The income summary is a temporary account used to make closing entries. The opposite entry then goes into the owner’s equity account. We want to remove this credit balance by debiting income … Since a company prepares financial statements at the end of each month, closing entries are prepared at the end of each month. We can now move that balance over to Retained Earnings. Credit to income summary … Closing journal entries are made at the end of an accounting period to prepare temporary accounts for the next period.. The entry to close the Income Summary account may include: A) a debit to Income Summary and a credit to the owner's capital account. 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