For the year ended December 31,a company had revenues of $187,000 and expenses of $109,000.The owner withdrew $37,000 during the year.Which of the following entries could not be a closing entry?
A)Debit Income Summary $78,000;credit Owner's,Capital $78,000.
B)Debit Owner's Capital $37,000;credit Owner Withdrawals $37,000.
C)Debit revenues $187,000;credit Income Summary $187,000.
D)Debit Income Summary $109,000,credit expenses $109,000.
E)Debit Income Summary $187,000;credit revenues $187,000.

Question

Quizplus · Accepted Answer

The closing entry should transfer the balances of revenue, expenses, and owner's withdrawals to the owner's capital account. Option E is incorrect because it would transfer the revenue back to the revenue account, not the owner's capital account. The other options are all valid closing entries.

For the Year Ended December 31,a Company Had Revenues of $187,000