Which of the following is the correct closing entry for a profit of $105 300?
A) No closing entry is required
B) Debit profit or loss summary account $105 300; credit owner's capital account $105 300
C) Debit owner's capital account $105 300; credit profit or loss summary account $105 300
D) Debit owner's capital account $105 300; credit bank $105 300

Question

Quizplus · Accepted Answer

Closing entries involve transferring the balances from temporary accounts (like the profit or loss summary account) to permanent accounts (like the owner's capital account). In this case, to close the profit of $105,300, you would debit the profit or loss summary account to zero it out and credit the owner's capital account to increase it by the profit amount.

Which of the Following Is the Correct Closing Entry for a Profit