The income statement for the month of June 2016 of Snap Shot Inc. contains the following information: Revenues $ 7 , 300 Expenses: Salaries and Wages Expense $ 3 , 000 Rent Expense 1 , 300 Advertising Expense 700 Supplies Expense 200 Insurance Expense 100 Total expenses 5 , 300 Net income $ 2 , 000 \begin{array}{lr} ext { Revenues } & & \$7,300 \ ext { Expenses: } & \ ext { Salaries and Wages Expense } & \$ 3,000 \ ext { Rent Expense } & 1,300 \ ext { Advertising Expense } & 700 \ ext { Supplies Expense } & 200 \ ext { Insurance Expense } & 100 \\quad ext { Total expenses } & & 5,300 \ ext { Net income } & & \$2,000\end{array} Revenues Expenses: Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Insurance Expense Total expenses Net income $3 , 000 1 , 300 700 200 100 $7 , 300 5 , 300 $2 , 000 After the revenue and expense accounts have been closed the balance in Income Summary will beA) a debit balance of $7300.B) a debit balance of $2000.C) a credit balance of $2000.D) a credit balance of $7300.

Question

The income statement for the month of June 2016 of Snap Shot Inc. contains the following information:    Revenues  $ 7 , 300  Expenses:   Salaries and Wages Expense  $ 3 , 000  Rent Expense  1 , 300  Advertising Expense  700  Supplies Expense  200  Insurance Expense  100  Total expenses  5 , 300  Net income  $ 2 , 000 \begin{array}{lr}	ext { Revenues }  & & \$7,300 \	ext { Expenses: }  &  \	ext { Salaries and Wages Expense }  &  \$ 3,000 \	ext { Rent Expense }  &  1,300 \	ext { Advertising Expense }  &  700 \	ext { Supplies Expense }  &  200 \	ext { Insurance Expense }  &  100 \\quad 	ext { Total expenses }  & & 5,300 \	ext { Net income }  & & \$2,000\end{array}  Revenues   Expenses:   Salaries and Wages Expense   Rent Expense   Advertising Expense   Supplies Expense   Insurance Expense   Total expenses   Net income  ​ $3 , 000 1 , 300 700 200 100 ​ $7 , 300 5 , 300 $2 , 000 ​   After the revenue and expense accounts have been closed the balance in Income Summary will beA)  a debit balance of $7300.B)  a debit balance of $2000.C)  a credit balance of $2000.D)  a credit balance of $7300.

James Achumbre · Accepted Answer

Final Answer : C, Explanation :  The Income Summary account is used to summarize the revenue and expenses for the period. After closing these accounts, the balance in the Income Summary will be a credit balance of $2,000, representing the net income (Revenues of $7,300 less Expenses of $5,300).

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