The balance in the J. Higgins, Withdrawals account was $4,700. The entry to close the account would include a
A) debit to Income Summary, $4,700.
B) credit to Income Summary, $4,700.
C) debit to J. Higgins, Capital, $4,700.
D) debit to J. Higgins, Withdrawals, $4,700.

Question

Quizplus · Accepted Answer

DTo close the J. Higgins, Withdrawals account, you would debit J. Higgins, Capital for $4,700 to decrease the owner's equity (C) and credit J. Higgins, Withdrawals for $4,700 to bring its balance to zero (D). This transfers the withdrawal amount out of the temporary withdrawals account and into the permanent capital account, reflecting the reduction in owner's equity due to withdrawals.

The Balance in the J