High Step Shoes had annual revenues of $195,000, expenses of $108,700, and dividends of $22,000 during the current year. The retained earnings account before closing had a balance of $307,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, Is: Multiple Choice Debit Retained earnings $64,300; credit Income Summary $64,300 Debit Retained earnings $86,300; credit Income Summery $86,300 Debit Income Summery $86,300, credit Retained earnings $86,300 Debit Retained earnings $307,000; credit income Summary $307,000 Debit income Summary $64.300; credit Retained earnings $64,300
High Step Shoes had annual revenues of $195,000, expenses of $108,700, and dividends of $22,000 during the current year. The retained earnings account before closing had a balance of $307,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, Is: Multiple Choice Debit Retained earnings $64,300; credit Income Summary $64,300 Debit Retained earnings $86,300; credit Income Summery $86,300 Debit Income Summery $86,300, credit Retained earnings $86,300 Debit Retained earnings $307,000; credit income Summary $307,000 Debit income Summary $64.300; credit Retained earnings $64,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:High Step Shoes had annual revenues of $195,000, expenses of $108,700, and dividends of $22,000 during the current year. The retained earnings
account before closing had a balance of $307,000. The entry to close the Income Summary account at the end of the year, after revenue and expense
accounts have been closed, is:
Multiple Choice
Debit Retained earnings $64,300; credit Income Summary $64,300
Debit Retained earnings $86,300; credit Income Summary $86,300
Debit Income Summary $86,300; credit Retained earnings $86,300
Debit Retained earnings $307,000; credit Income Summary $307,00o
Debit Income Summary $64,300; credit Retained eanings $64,300
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Lets understand the basics.
Income statement summary is a summary which shows how much net income is there after deducting expenses from the revenue.
All the expense accounts are closed in income statement by debiting income statement and crediting expense accounts.
All the income accounts are closed in income statement by crediting income statement and debiting income accounts.
Net of the above transfer to retained earning by the either debiting or crediting the income statement and transfer it to retained earnings.
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