A business has beginning Capital of $100 000. During the year, Sales revenues were $20 000, Sales returns and allowances were $300, Sales discounts were $700, Cost of sales were $12 000, and all other expenses totaled $4 500. $1 000 of drawings were taken. The fourth closing entry would include which of the following line items?
A)Credit to Income summary of $1 000
B)Debit to Capital of $16 500
C)Debit to Capital of $1 000
D)Debit to Income summary of $1 000

Question

Quizplus · Accepted Answer

The fourth closing entry involves closing the drawings account to the capital account. Therefore, a debit to Capital of $1,000 is needed to reflect the drawings taken.

A Business Has Beginning Capital of $100 000