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Cornerstones of Financial Accounting4th EditionJay Rich, Jeff Jones 2,543 solutions If revenues are $270,000, expenses are $220,000, and dividends are $30,000, before it is closed, the Income Summary will have a: A) Credit balance of $50,000 Shown below is the adjusted Trial Balance for Simon Incorporated, on December 31, after the first year of operations, after adjusting entries: Debit: Credit: The entry to close the Service Fees Earned account will: A) Produce a zero balance in that account when posted B) Include a debit to Income Summary C) Include a credit to Service Fees Earned D) Include a debit to Capital Stock Shown below is an adjusted trial balance for Novelty Toys, Incorporated, on December 31, Year 1: Debit: Credit: Totals $40,875 The Income Summary will have what balance before it is closed? A) Zero D) $11,000 When they are closed, the revenue account balance of $22,750 will be credited to the Income Summary, and the expense account balances totaling $11,750 (or $8,000 + $1,625 + $2,125) will be debited to the Income Summary. Before it is closed, the Income Summary will have a credit balance of $11,000 (or credits of $22,750 − debits of $11,750). Alternatively, before it is closed, the balance of the Income Summary will equal the net income of the period. Net income = Revenues of $22,750 − Expenses of ($8,000 + $1,625 + $2,125) = $22,750 − $11,750 = $11,000 Shown below is an adjusted trial balance for Novelty Toys, Incorporated, on December 31, Year 1: Debit: Credit: Totals $40,875 The entry to close the Fees Earned account will: A) Produce a zero balance in that account when posted B) Include a debit to Income Summary C) Include a credit to Fees Earned D) Include a debit to Capital Stock Shown below is an adjusted trial balance for Novelty Toys, Incorporated, on December 31, Year 1: Debit: Credit: Totals $79,875 Net income for the period equals: A) $14,250 Shown below is an adjusted trial balance for Novelty Toys, Incorporated, on December 31, Year 1: Debit: Credit: Totals $83,625 Net income for the period equals: A) $14,750 What is the balance in the income summary account before it is closed for the period?Income summary is a nondefined account category. This means that it is not an asset, liability, stockholders' equity, revenue, or expense account. The account has a zero balance throughout the entire accounting period until the closing entries are prepared.
What is closed to the income summary account?The income summary account is only used in closing process accounting. Basically, the income summary account is the amount of your revenues minus expenses. You will close the income summary account after you transfer the amount into the retained earnings account, which is a permanent account.
Which of the following accounts should the balance in the income summary account be closed?Answer and Explanation: Answer: b. depreciation expense - machinery. Income statement accounts such as revenues and expenses, including depreciation are all closed to the Income Summary account at the end of the fiscal year as part of the closing process.
Which of the following accounts will be closed to income Summary quizlet?Debit to Income Summary and a credit to the expense account. Which of the following accounts will be closed to Income Summary? Prepaid Expenses.
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Quizlet the balance in the income Summary account before it is closed will be equal to
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