The income statement for the month of June, 2014 of Taylor Enterprises contains the following information: After the revenue and expense accounts have been closed, the balance in Income Summary will be
A) ₤0.
B) a debit balance of ₤3,900.
C) a credit balance of ₤3,900.
D) a credit balance of ₤8,000.

Question

The income statement for the month of June, 2014 of Taylor Enterprises contains the following information:  After the revenue and expense accounts have been closed, the balance in Income Summary will be
A) ₤0. 
B) a debit balance of ₤3,900. 
C) a credit balance of ₤3,900. 
D) a credit balance of ₤8,000.

Quizplus · Accepted Answer

The total revenue for the month of June is ₤18,500 and the total expenses are ₤14,600. Therefore, the net income for the month is ₤3,900. This amount will be transferred to the Income Summary account. Since net income is a credit balance, the Income Summary account will have a credit balance of ₤3,900 after the revenue and expense accounts are closed.

The Income Statement for the Month of June, 2014 of Taylor