Question

An expense account is normally closed by debiting _______ and crediting the expense account.

1) Income Summary
2) Cash
3) Accounts Receivable
4) Inventory

Answer 1

An expense account is closed by debit to the Income Summary and a corresponding credit to the expense account itself, zeroing the balance for a new accounting period.

Step-by-step explanation:

An expense account is closed by debit to the Income Summary and a corresponding credit to the expense account itself, zeroing the balance for a new accounting period. An expense account is normally closed by debiting Income Summary and crediting the expense account. This process is part of the accounting cycle, typically done at the end of an accounting period to transfer the balances from the temporary accounts to the permanent accounts. To close the expense accounts, you would debit Income Summary for the total expenses, and each individual expense account would be credited by the amount of its own balance, effectively zeroing it out. This prepares the books for the new accounting period.