Closing Revenue Account Quiz
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Questions and Answers

When closing the revenue account, which entry includes a credit to income summary for?

  • Transferring the debit balance of the revenue account to the income summary account
  • Transferring the debit balance of the income summary account to the revenue account
  • Transferring the credit balance of the revenue account to the income summary account (correct)
  • Transferring the credit balance of the income summary account to the revenue account

    • In the closing entry for the revenue account, what does the income summary account represent?

  • An equity account representing the owner's share of the revenue
  • A liability account representing the company's obligation to pay taxes on revenue
  • A temporary account used to summarize revenue and expense balances (correct)
  • A permanent account used to record the net income for the period

    • What is the purpose of closing the revenue account?

  • To adjust the revenue balance for tax reporting purposes
  • To transfer the revenue balance to the owner's personal account
  • To reset the revenue account balance to zero for the next accounting period
  • To calculate the company's net income or net loss for the period (correct)

    • How does the purchase of baking supplies on account affect the Baking Supplies account?

    <p>Increase</p> Signup and view all the answers

    What is the effect of the owner's investment of cash on the Cash account?

    <p>Increase</p> Signup and view all the answers

    What is the impact of providing services on account on the Service Revenue account?

    <p>Increase</p> Signup and view all the answers

    How does the payment of rent expense affect the Rent Expense account?

    <p>Decrease</p> Signup and view all the answers

    What is the impact of the collection on account on the Accounts Receivable account?

    <p>Decrease</p> Signup and view all the answers

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