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During 2017, Carla’s Crafts reported net income of $5,900 and Sales Revenue of $13,000. Carla’s closing entries include a
A : credit to Income Summary for $7,100.
B : debit to Income Summary for $7,100. <<< RIGHT ANSWER
C : credit to Retained Earnings for $7,100.
D : debit to Income Summary for $13,000.
Please explain the answer
Expert Answer
| Net income = Sales Revenue-Expenses | ||||
| 5900 = 13000-Expenses | ||||
| Expenses = 13000-5900 = $7100 | ||||
| The closing entries for expenses are: | ||||
| Income Summary | 7100 | |||
| Expenses | 7100 | |||
| Option B debit to Income Summary for $7,100 is correct | ||||
