Question

56) The income statement credit comes of the worksheet showed the following revenu Maintenance fees Professionales 700 The journal entry to close the revenue accounts Al income Summary 1,500 Maintenance Profesionales 700 B) Maintenance fees BO Protessional fees Income Summary 1.500 Capital 1.500 Income Summary 1.500 Dj Maintenance Fees Professional Tees Capital BDO 700 1.500 67) The business failed to close any of the revenue accounts. The result of this error is that Al revenues will be understated B) capital will be understated C) the assets will be overstated Dj the liabilities will be overstated 6) When income Summary has a credit balance and the account is closed, A) Capital is decreased Bj Capital is increased C) withdrawals is increased Dj None of these are correct When revenue is closed A) Owner's Capital will be debited income Summary will be debited income Summary will be credited Dj None of these are correct Pj When the expenses are dosed Al Owner's Capital will be debited income Summary will be debited income Summary will be created

Answer 1

68) When Income summary has a credit balance and the amount is closed, it will be closed with a debet for that amount and a credit to Retained earnings or owner's capital amount. Hence capital will increase Coption by 69 When the revenue is closed the revenues will be debited and Income summary will be credited Coptional all the 70 When the expenses are closed credited and Income summary will be delired expenses are Coption b)

When closing entry for revenues is passed the Income summary ase is credited and the various revenues are debited. - The closing entry will be Maintenance fees Projenional fees Income summary 800 700 1 500 67 If the businen fails to close any of the revenue amounts then the capital will be understated since the income Summary balance is posted to retained earnings which a part of capital and Revenues are credited to Income summary Coption b) is