[kekebrown]

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

a. Supplies Expense
b. Accumulated Depreciation
c. Prepaid Expenses
d. Unearned Revenues

Ithink it is D

[pready]

The answer is Supplies Expense because this is an Income Statement account. Inocme Statement Accounts are known as temporary accounts.

The other choices are Balance Sheet accounts. Balance Sheet acocunts are permanent accounts.

Only Temporary Accounts are Closed at the end of the Accounting Period.

Unearned Revenue is a Liability Account. For an example you pay $24 a year for a magazine subscription. When the Publisher receives the $24 it is recorded as:
Debit Cash 24
Credit Unearned Revenue 24

This is a liability because the publisher has to provide you one year of magazines.

When the revenue is recognized then if you received 6 months worth of magazines then the Publisher would record the transaction as:
Debit Unearned Revenue 12
Credit Revenue 12