Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014. The entry required to close the expense accounts at the end of the period includes a:

Question

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.  The entry required to close the expense accounts at the end of the period includes a:

Quizplus · Accepted Answer

The expense accounts have a total of $33,520 in debits, so the entry to close them would require a debit to Income Summary for the same amount. This would be offset by a credit to retained earnings for the same amount. Option A and B are incorrect because they use the wrong amount, and option D is incorrect because it reverses the debit and credit entries. Therefore, the best choice is C.

Bob Evans Owns a Business, Beachside Realty, That Rents Condominiums