Question

arn Carleton.ca Quiz 2 Academic Support Library Carleton Central MyCarleton Email Victory A. [10543] Financial Accounting (LEC) Winter 2020 courses / BUSI1001R Winter 2020 / Quizzes / Quiz 2 BC Incorporated is in the process of closing their books at year-end. The following information is reported on the income statement Salary Expense $27 Interest Expense $16 Revenue $1023 Rent Expense $73 Which of the following are correct closing entries: Select one: O a. A debit to retained earnings of $ 1023 b. A debit to retained earnings of $907 c. A credit to retained earnings of $1066 o d. A credit to retained earnings of $ 907 Check On July 1, 20x8, Hathaway Ltd. purchased a 4-year insurance policy and paid a premium of $37077. Hathaway has a December 31 year

Answer 1

Solution:

Net income for the period = Revenue - Salary expense - Interest expense - Rent expense

= $1,023 - $27 - $16 - $73 = $907

Correct closing entries are "A credit to retained earnings of $907"

Hence option d is correct.