Register now or log in to join your professional community.
a. a debit to owner's capital, a credit to Income Summary b. a debit to Fees, a credit to owner's capital c. a debit to Income Summary, a credit to owner's capital d. a debit to owner's capital, a credit to Fees.
Let us use the Option C which is correct
Only one choice is correct , I will put answer after48 hours.
Khalid
true ans is C
DR Income statment A/c
CR Retained Earnings A/c or Accumlated Profit & loss A/c
whenever there is a net income the income summery account will have a credit balance and if there is a net loss the income summery account will have a debit balance. therefore, when i come to answer your question so as to close the balance of the income summery and increase the owners equity you must do the following journal entry
debit credit
income summery account ........................ XXXXXXX
owner's equity ........................................................................... XXXXXXX
therefore choice C is the correct answer
Will go with option >>>>>>>>>C
C as income account will be closed for the period by posting debit entry and owner`s capital will be increased.
Option C
where is the Question? in other words the goal of the processing is the account to be used, all the above can be used.
C is correct option.(but first you will have to Debit net income and to credit income summary account)
C
