A company had revenues of $58,500 and expenses of $45,500 for the accounting per

Question

A company had revenues of $58,500 and expenses of $45,500 for the accounting period. The owner withdrew $6,450 in cash during the same period. Which of the following entries could not be a closing entry?

Debit Owner's, Capital $6,450, credit Owner's, Withdrawals $6,450.

Debit Income Summary $58,500; credit Revenues $58,500.

Debit Revenues $58,500; credit Income Summary $58,500.

Debit Income Summary $45,500, credit Expenses $45,500.

Debit Income Summary $13,000; credit Owner's, Capital $13,000.

A company had revenues of $58,500 and expenses of $45,500 for the accounting period. The owner withdrew $6,450 in cash during the same period. Which of the following entries could not be a closing entry?

Explanation / Answer

Ans:

1). Debit Owner's, Capital $6,450, credit Owner's, Withdrawals $6,450:

This is right entry as it is drawing from owner. So Capital 9is debited & Owners withdrawal is credited.

2). Debit Income Summary $58,500; credit Revenues $58,500: It is a wrong Entry Could not be a closing entry.

Incomes are never be debited . So it is a wrong entry.

3). Debit Revenues $58,500; credit Income Summary $58,500 . Income is credited. It is a closing entry.

4). Debit Income Summary $45,500, credit Expenses $45,500. This is also a closing entry .

5). Debit Income Summary $13,000; credit Owner's, Capital $13,000 : This is also a closing entry. Profits from business is credited in owner's capital.

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