Question

The Retained earnings account has a credit balance of $48,000 before closing entries are made. Total revenues for the period are $66,200, total expenses are $45,300, and dividends are $13,400. What is the correct closing entry for the expense accounts

Answer 1

Explanation:

The closing entry to close the expenses account is as follows

Income summary A/c Dr $45,300

         To Expenses A/c $45,300

(Being the expenses account are closed)        

To close the expenses account, we debited the income summary account and credited the expense account. Both the accounts are recorded at $45,300 so that the proper posting could be done