Central Company has sales of $10,000 and expenses of $4,000. Which of the follow

Question

Central Company has sales of $10,000 and expenses of $4,000. Which of the following is the correct closing entry?

Debit retained earnings, debit expenses and credit sales.

Credit retained earnings, credit expenses and debit sales.

Debit expenses and credit sales.

Credit retained earnings, debit expenses and credit sales.

Debit retained earnings, debit expenses and credit sales.

Credit retained earnings, credit expenses and debit sales.

Debit expenses and credit sales.

Credit retained earnings, debit expenses and credit sales.

Explanation / Answer

Ans) Credit retained earnings, credit expenses and debit sales.

Sales $     10,000    To Retain earing account $     6,000    To Expenses account $     4,000 (Being Closing entry)

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