Question

How do you close the expense? accounts? A. Credit Income? Summary; debit the expense accounts B....

How do you close the expense? accounts?

A.

Credit Income? Summary; debit the expense accounts

B.

Debit Income? Summary; credit the expense accounts

C.

Credit? Capital; debit the expense accounts

D.

Debit? Capital; credit the expense accounts

Business   Accounting   
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Answer #1

B.

Debit Income? Summary; credit the expense accounts

Expenses are recorded at the time of occuring.During the year various expenses are incurred and revenue earned.
So, at the end of year to calculate profit or loss from all revenues and expenses these items are aggregated and
final result show the profit or loss durinf the period.
All expenses have debit balance.Because expense are closed at the end of period, they are credited and income statement wherein it
is transferred is debited.
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