The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { l r l r }
\text { Revenue } & \$ 700 & \text { Cash } & \$ 500 \
\text { Expenses } & \$ 400 & \text { Accounts Receivable } & \$ 350 \
\text { Capital } & \$ 7,500 & \text { Withdrawals } & \$ 1,000
\end{array}$$
After closing entries are posted, what is the balance in the Cash account?

Question

The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { l r l r } 
\text { Revenue } & \$ 700 & \text { Cash } & \$ 500 \
\text { Expenses } & \$ 400 & \text { Accounts Receivable } & \$ 350 \
\text { Capital } & \$ 7,500 & \text { Withdrawals } & \$ 1,000
\end{array}$$
After closing entries are posted, what is the balance in the Cash account?

Quizplus · Accepted Answer

Closing entries are used to transfer the balances of temporary accounts (revenues, expenses, and withdrawals) to the owner's capital account. They do not affect the balance of permanent accounts such as Cash.

The Following Normal Account Balances Were Found on the General