The entry to close the Freight-In account will include which of the following?
A)Debit to Freight-In
B)Credit to Income Summary
C)Debit to Income Summary
D)Debit to Freight-Out

Question

Quizplus · Accepted Answer

The Freight-In account is a temporary account that needs to be closed at the end of the accounting period. To do so, we need to debit the income summary account (which will offset against the credit balance in the income summary account) and credit the freight-in account. Therefore, the entry to close the freight-in account will include a debit to income summary and a credit to freight-in. Option A is incorrect because we credit the Freight-In account to close it, not debit it. Option B is incorrect because we don't credit the income summary account to close the Freight-In account. Option D is incorrect as we have to make a debit entry and credit to freight-in account only.

The Entry to Close the Freight-In Account Will Include Which