The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { | l | l | }
\hline \text { Revenue } \$ 800 & \text { Cash } \$ 500 \
\hline \text { Expenses } \$ 400 & \text { Accounts Receivable } \$ 350 \
\hline \text { Capital } \$ 7,500 & \text { Withdrawals } \$ 1,000 \
\hline
\end{array}$$ After closing entries are posted,what is the balance in the Revenue account?

Question

The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { | l | l | } 
\hline \text { Revenue } \$ 800 & \text { Cash } \$ 500 \
\hline \text { Expenses } \$ 400 & \text { Accounts Receivable } \$ 350 \
\hline \text { Capital } \$ 7,500 & \text { Withdrawals } \$ 1,000 \
\hline
\end{array}$$ After closing entries are posted,what is the balance in the Revenue account?

Quizplus · Accepted Answer

Closing entries transfer the balances of revenue and expense accounts to the income summary account and then to the retained earnings (or capital) account. Therefore, the balance in the revenue account after closing entries will be $0.

The Following Normal Account Balances Were Found on the General