MamaBearr5435 MamaBearr5435

12-03-2020
Business

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After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,000 debit balance. This result implies that Cleaver earned a net income of $4,000.A. True

B. False

Respuesta :

andromache andromache

15-03-2020

Answer:

False

Explanation:

As we know that

Net income = Total revenue - total expenses

OR

Net loss = Total expenses - total revenues

Since in the given case the income summary account has a debit balance that reflects that the company has suffering from the net loss as expenses are exceeded than revenues earned

So in the given case, the Cleaver has a net loss of $4,000

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