O. Jarvis Company is preparing the closing entries at the end of the accounting

ID: 2337674 • Letter: O

Question

O. Jarvis Company is preparing the closing entries at the end of the accounting period. Jarvis Company's trial balance has normal balances in the following revenue accounts terest Revenue nearned Service Rev 800 10100 Which of the following represents the closing general journal entry for Jarvis Company's revenue accounts? Retained Earnings 62.900 Service Revenue Interest Revenue Unearned Service Revenue 50,000 2,800 0,100 Debil Credt 52.800 Retained Earnings Service Revenue Interest Revenue 2.800 Service Revenue 50000 2,800 10100 Unearned Service Revenue Retained Earning 62,900 Service Revenue Intérest Revenue Retained Earn 50,000 2.800 52.800 O Type here to search

Explanation / Answer

Correct Closing Entry

Accounts title

Debit

Credit

Service Revenue

$ 50,000.00

Interest Revenue

$ 2,800.00

Retained Earnings

$ 52,800.00

Unearned Service revenue is a liability and not revenue hence it will be transferred to Retained earnings. On the other hand Service revenue and Interest revenue are.

Service revenue and Interest revenues have credit balances and to close the accounts the balance in these accounts needs to be debited so that the ending balance will be zero.

All the balance of Service revenue and Interest revenue will be transferred to Retained earnings by crediting retained earnings account.