A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?
A) Debit Income Summary $13,000; credit Owner's, Capital $13,000.
B) Debit Income Summary $75,000; credit Revenues $75,000.
C) Debit Revenues $75,000; credit Income Summary $75,000.
D) Debit Income Summary $62,000, credit Expenses $62,000.
E) Debit Owner's, Capital $8,000, credit Owner's, Withdrawals $8,000.

Question

Quizplus · Accepted Answer

The entry "Debit Income Summary $75,000; credit Revenues $75,000" is incorrect because it reverses the normal closing entry for revenues, which should be "Debit Revenues; credit Income Summary."

A Company Had Revenues of $75,000 and Expenses of $62,000