Question

71) When the Withdrawals account is closed, A) Owner's Capital will be debited. B) Income Summary will be debited. C) Income Summary will be credited Dj None of these are correct. 72) The Income Summary account debited and the expense accounts credited would be the result of Al closing the income Summary account--there is a net income. B) closing the revenue accounts c) closing the income Summary accounts - there is a net loss. D) closing the expense accounts 73) The revenue accounts debited and the Income Summary account credited would be the result of A) closing the income Summary account--there is a net income. B) closing the Income Summary account there is a net loss. C) closing the revenue accounts D) closing the expense accounts 74) When closing the income Summary account when there is a net income A) Capital would increase B) Capital would decrease. C) Capital would remain the same. D) None of these are correct. 75) When closing the Withdrawal account, A) Capital would increase. B) Capital would decrease. C) Capital would remain the same. D) None of these are correct. 76) The entry to close the Depreciation Expense account would cause A) the Capital account balance to increase. B) the Capital account balance to decrease. C) the Depreciation Expense account balance to decrease. D) None of these are correct.

Answer 1

Question:71

The Answer is A) Owner`s Capital will be debited

Explanation:

1) Withdrawal account is a debit balance and in order to close it we have to transfer it to owner`s capital account by debiting it. SO, The correct option is A.

2) Option B and C are not correct because withdrawals are closed to capital account but not to income summary account.

3) Option D is not correct because option A is correct.

Question:72

The Answer is D) Closing the expense accounts.

Explanation:

1) Expense Closing Entry:

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	Income Summary	xx
	Salaries Expense		xx
	Advertisement Expense		xx
	(To close Expense account )

2) So, Remaining options are not correct.

Question:73

The Answer is C) Closing the revenue accounts.

Explanation:

1) Revenue Closing Entry:

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	Service Revenue	xx
	Income Summary		xx
	(To close Income account )

2) So, Remaining options are not correct.

Question:74

The Answer is A) Capital would increase

Explanation:

1) Net income will always increases the capital account. So, With closing entry of income summary account capital will increase because of net income

2) So, Remaining options are not correct.