A company had $80,000 of Sales revenue and $75,000 of Expenses. Which of the following would be the first of three year-end closing entries?

Question

Quizplus · Accepted Answer

The first step in the year-end closing process is to close out the revenue accounts. This is done by debiting the revenue accounts and crediting the income summary account for the total amount of revenues earned during the period. In this case, the correct entry is to debit Revenues for $80,000 and credit Income summary for $80,000, which matches option D.

A Company Had $80,000 of Sales Revenue and $75,000 of Expenses