Which of the following is a possible closing entry?
A)Debit Cash,credit Service Revenue.
B)Debit Cash,credit Retained Earnings.
C)Debit Service Revenue,credit Retained Earnings.

Question

Quizplus · Accepted Answer

The closing entry is designed to transfer the balances of temporary accounts (such as Service Revenue) to the Retained Earnings account. Therefore, the entry should be a debit to Service Revenue (temporary account) and a credit to Retained Earnings (permanent account). Option A is incorrect because it is incorrectly crediting a revenue account. Option B is incorrect because it is not closing a revenue account.

Which of the Following Is a Possible Closing Entry