Chapter 3, Problem 8E

To determine

Revenue:

Revenue is referred to as the total amount of money which is generated from the sale of services and goods by a company.

Expenses:

These are those costs that are spent to generate the revenue for the company. Expenses may be in the form of wages, salaries, depreciation, bad debts and other charges.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the company are deducted from the total revenue of the Company.

Closing entries:

Closing entries are those entries which are made at the end of the year to close the all temporary accounts and transfer their balance to the permanent account.

To prepare:

To close the net sales account.