Use the work sheet for Finley Company to answer the questions that follow. The entry to close expenses would be
A) Wages Expense 63,000 Rent Expense 18,000 Depreciation Expense 15,000 Income Summary 96,000
B) Expenses 96,000 Income Summary 96,000
C) Wages Expense 63,000 Rent Expense 18,000 Depreciation Expense 15,000 Dividends 96,000
D) Income Summary 96,000 Wages Expense 63,000 Rent Expense 18,000 Depreciation Expense 15,000

Question

Use the work sheet for Finley Company to answer the questions that follow.  The entry to close expenses would be
A) Wages Expense 63,000 Rent Expense 18,000 Depreciation Expense 15,000 Income Summary 96,000 
B) Expenses 96,000 Income Summary 96,000 
C) Wages Expense 63,000 Rent Expense 18,000 Depreciation Expense 15,000 Dividends 96,000 
D) Income Summary 96,000 Wages Expense 63,000 Rent Expense 18,000 Depreciation Expense 15,000

Quizplus · Accepted Answer

The entry to close expenses involves debiting the expenses (Wages Expense, Rent Expense, and Depreciation Expense) and crediting the Income Summary account for the total amount of expenses incurred ($96,000). Therefore, Option D correctly follows this procedure by debiting Income Summary $96,000 and crediting the individual expenses for their respective amounts. Dividends would not be used in the closing entry for expenses.

Use the Work Sheet for Finley Company to Answer the Questions