After posting the entries to close all revenue and expense accounts, Marker Company's Income Summary account has a credit balance of $9,200, and its Marker, Withdrawals account has a debit balance of $4,100. These balances indicate that net income for the current accounting period amounted to $5,100.

a. True

b. False

Question

Business

Taffy

2 September, 04:51

After posting the entries to close all revenue and expense accounts, Marker Company's Income Summary account has a credit balance of $9,200, and its Marker, Withdrawals account has a debit balance of $4,100. These balances indicate that net income for the current accounting period amounted to $5,100.

a. True

b. False

+5

Answers (1)

Know the Answer?

Darrell Clements · Answer 1

The correct answer is False.

Explanation:

This statement is not true, because the income accounts before being closed must have the total balance of income for the period. In this case, the credit balance must remain as a reconciliation for the following period, because withdrawals do not indicate a net movement of the income account.