Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question.AccountDebit BalanceCredit Balance Cash 20,500 Merchandise Inventory 1,000 Accounts Payable 2,800 R. Holloway, Drawing 500 R. Holloway, Capital 13,000 Sales 15,000 Purchases 2,000 Purchase Returns and Allowances 200 Rent Expense 3,000 Salaries Expense 4,000 Select the closing entry that RB Auto would make at the end of the accounting period to close their revenue accounts and income statement accounts with credit balances.
A. debit Sales and credit Income Summary for $15,000.
B. debit Sales for $15,000; debit R Holloway, Capital for $13,000 and credit Income Summary for $28,000.
C. debit Sales $15,000; debit Purchase Returns and Allowances $200 and credit Income Summary for $15,200.
D. debit Income Summary for $15,000 and credit Sales for $15,000.
Answer: C
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