For the year ended December 31, a company has revenues of $324,000 and expenses of $199,500. The owner withdrew $52,800 during the year. The balance in the owner's capital account before closing is $88,000. Which of the following entries would be used to close the withdrawal account? Multiple Choice Debit Owner's Withdrawals $52,800; credit Owner's Capital $52,800. Debit Owner's Capital $88,000; credit Income Summary $88,000. Debit Income Summary $52,800; credit Owner's, Capital $52,800.
For the year ended December 31, a company has revenues of $324,000 and expenses of $199,500. The owner withdrew $52,800 during the year. The balance in the owner's capital account before closing is $88,000. Which of the following entries would be used to close the withdrawal account? Multiple Choice Debit Owner's Withdrawals $52,800; credit Owner's Capital $52,800. Debit Owner's Capital $88,000; credit Income Summary $88,000. Debit Income Summary $52,800; credit Owner's, Capital $52,800.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:For the year ended December 31, a company has revenues of $324,000 and
expenses of $199,500. The owner withdrew $52,800 during the year. The
balance in the owner's capital account before closing is $88,000. Which of
the following entries would be used to close the withdrawal account?
Multiple Choice
Debit Owner's Withdrawals $52,800; credit Owner's
Capital $52,800.
Debit Owner's Capital $88,000; credit Income
Summary $88,00.
Debit Income Summary $52,800; credit Owner's,
Capital $52,800.
Debit Owner's Capital $52,800; credit Owner's
Withdrawals $52,800.
Debit Income Summary $88,000, credit Owner's
Withdrawals $88,000.
Expert Solution
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Step 1 Introduction
The closing entries are prepared to close the temporary accounts of the business including revenue, expenses, Drawings, dividend, etc.
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