Use the following account balances from the adjusted trial balance of Gees Catering Select the correct closing entry that Gees Catering would make to close their Income Summary account at the end of the accounting period.

Question

Use the following account balances from the adjusted trial balance of Gees Catering  Select the correct closing entry that Gees Catering would make to close their Income Summary account at the end of the accounting period.

Quizplus · Accepted Answer

The Income Summary account has a credit balance of $19,500, indicating that expenses exceeded revenues for the period. Therefore, to close the account, we need to debit it for $19,500 and credit Retained Earnings for the same amount. Option C is the only one that reflects this. Option A and B have the wrong amount for the debit side, and Option D has the wrong account being credited.

Use the Following Account Balances from the Adjusted Trial Balance