Question

record the entry to close the expense accounts

record the entry to close the expense accounts

Homework Answers

Answer #1

Expenses accounts normally have debit balances. Hence, when expenses are closed, Income summary is debited and expenses are credited.

Journal

Income summary ....
Expenses .......

For example, if there are expenses like cost of goods sold 1,000, salary expense $500, advertising expense $200 and insurance expense $100, following entry would be made to close the given expenses:

Journal

Income summary 1,800
cost of goods sold 1,000
salary expense 500
advertising expense 200
insurance expense 100
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