ACT 200
Spring 2020
TAP 2 – 15% – Version 3
Name ____________________________________ ID______________________
Exercise 1. (75 points)
World Company shows the following balances in selected accounts of its adjusted trial
balance as of December 31,2019.
Supplies 20,000 Service revenue 100,000
Supplies Expense 4,000 Depreciation expense 30,000
Accounts Receivable 10,000 Utilities expense 6,000
Dividends 15,000 Rent expense 13,000
Instructions: Prepare the closing entries at December 31, 2019.
Exercise 2. (25 points)
Describe the nature of the Income Summary account and identify what accounts should be
closed using this account.
Bonus question. (10 points)
Please say if the statement is True or False.
Closing revenue and expense accounts to the Income Summary account is an optional
bookkeeping procedure.