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Which of the following should be closed to Income Summary?*a. Accumulated Depreciationb. Withdrawalsc. Salary Expensed. All of these

Question

Which of the following should be closed to Income Summary?

  • a. Accumulated Depreciation
  • b. Withdrawals
  • c. Salary Expense
  • d. All of these
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Solution

The correct answer is c. Salary Expense.

Here's why:

The Income Summary account is a temporary account used during the closing process that contains a summary of all the revenue and expense accounts.

a. Accumulated Depreciation is a contra asset account and is not closed to the Income Summary account.

b. Withdrawals are not an expense but rather a reduction of owner's equity. Therefore, they are not closed to the Income Summary account.

c. Salary Expense is an expense account and should be closed to the Income Summary account.

d. All of these is not correct because only Salary Expense should be closed to the Income Summary account.

This problem has been solved

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