MC Qu 293 After preparing and posting the closing Ater prepa

MC Qu. 293 After preparing and posting the closing Ater preparing and posting the closing enies for nevenues and espenses, the income summany account has a de balance of $24000 The enty to close e inom will be Mutiple Choice Debilt Dividends $24,0o0 credt ncome Summary $24,000 5 3 command option

Solution

Ans is D Debit retained earnings $24,000; Credit Income Summary $24,000

Explanation: Income summary account is always closed to retained earnings whether it has debit balance or credit balance, Debit balance of Income summary represents that there is excess of expenses over revenues and vice versa for Credit balance, so for a debit balance in income summary its reversed via debit to retained earnings and credit to income summary.