Question

At the end of the accounting period, but before closing entries are made, Harry, the proprietor of Harry's Bar and Grill, has a debit balance of $24,500 in his drawing account and a credit balance of $72,300 in his capital account. Which of the following statements is correct?

A) Harry's net income was $47,800.

B) During the closing process, Harry will debit the drawing account for $24,500 and credit the capital account for $24,500.

C) During the closing process, Harry will debit the capital account for $24,500 and credit the drawing account for $24,500.

D) Harry's Retained Earnings account was $47,800.

Answer

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