The First Closing Entry For A Retail Business Will Include Which Of The Following? (MCQ)

Sales Account

The first closing entry for a retail business or a merchandising business will include “Sales” as in the Closing Entry Process, the first closing entry includes all of the Revenue Accounts which are closed to Income Summary Account, so revenue accounts have no balances at the end of the accounting period.

To close sales account into income summary account, the following Sales Revenue Closing Entry is recorded as shown below:

                                                                  Sales a/c  XXX

                                                                                      Income Summary Account a/c  XXX

 

                                                 (Sales Revenue Account Closed To Income Summary Account)

As positive balance of sales is credit, so to transfer sales to income summary account, we debit it and credit income summary account.