The sales revenue account has a credit balance of $367,200 at year end.After closing entries are made,the account will:

Question

Quizplus · Accepted Answer

Closing entries are made to transfer temporary accounts (including sales revenue) to the permanent equity accounts. In the case of sales revenue, a credit balance means that the company has generated more revenue than expenses during the year, resulting in net income. To transfer this balance to the permanent equity account, a debit entry is required, which will result in a zero balance in the sales revenue account. Therefore, the correct answer is B.

The Sales Revenue Account Has a Credit Balance of $367,200