The beginning capital balance is $6,200, there are no additional investments, but the owner did withdraw $500 during the accounting period. The period's revenue is $4,300 and expenses total $6,100. What is the ending capital balance (after closing entries)?
A) $6,200
B) $6,700
C) $4,400
D) $3,900

Question

Quizplus · Accepted Answer

The ending capital balance is calculated by taking the beginning capital balance, adding the period's net income (or subtracting net loss if expenses exceed revenues), and then subtracting any withdrawals by the owner. Here, beginning capital is $6,200, net income is revenue minus expenses ($4,300 - $6,100 = -$1,800, which is a net loss), and withdrawals are $500. So, $6,200 - $1,800 (net loss) - $500 (withdrawals) = $3,900.

The Beginning Capital Balance Is $6,200, There Are No Additional