The income statement for the year 2016 of Bugati Co. contains the following information: $\begin{array}{lr}
\text { Revenues } &&\$73,000 \
\text { Expenses: } & \
\text { Salaries and Wages Expense } & \$ 43,000 \
\text { Rent Expense } &12,000 \
\text { Advertising Expense } & 11,000 \
\text { Supplies Expense } &6,000 \
\text { Utilities Expense }& 3,500\
\text { Insurance Expense }&4,000 \
\quad \text { Total expenses } &&79,500 \
\text { Net income (loss)} &&\$(6,500)
\end{array}$
After all closing entries have been posted the revenue account will have a balance of
A) $0.
B) $73000 credit.
C) $73000 debit.
D) $6500 credit.

Question

The income statement for the year 2016 of Bugati Co. contains the following information: $\begin{array}{lr}
\text { Revenues } &&\$73,000 \
\text { Expenses: } & \
\text { Salaries and Wages Expense } & \$ 43,000 \
\text { Rent Expense } &12,000 \
\text { Advertising Expense } & 11,000 \
\text { Supplies Expense } &6,000 \
\text { Utilities Expense }& 3,500\
\text { Insurance Expense }&4,000  \
\quad \text { Total expenses } &&79,500 \
\text { Net income (loss)} &&\$(6,500)
\end{array}$
 After all closing entries have been posted the revenue account will have a balance of
A) $0.
B) $73000 credit.
C) $73000 debit.
D) $6500 credit.

Quizplus · Accepted Answer

After all closing entries have been posted, the revenue account will have a balance of $0 because closing entries are made to transfer the balances of temporary accounts (like revenues, expenses, and dividends) to permanent accounts (like retained earnings), resetting the temporary accounts to zero for the next accounting period.

The Income Statement for the Year 2016 of Bugati Co