A credit to a liability account:

Select one:

a.indicates an increase in the amount of expenses.

b.indicates an increase in the amount owed to creditors.

c.indicates a decrease in the amount of assets.

d.indicates an increase in the amount available to the owners.

The following information relates to TipTopTea for the year ended 30 June 2020.

Accounts payable

82,500

Accounts receivable

7,500

Accumulated depreciation- Equipment

11,800

Bank Loan (due in 2025)

38,000

Capital

105,400

Cash at bank

186,400

Depreciation expense-Equipment

8,600

Drawings

4,000

Electricity expense

7,500

Equipment

180,000

Prepaid rent

16,500

Rent expense

32,000

Service revenue

282,600

Supplies

3,900

Unearned revenue

19,200

Wages expense

135,400

Wages payable

42,500

Required;Prepare the closing entries for TipTopTea as at 30 June 2020. Narrations are required. (5 marks)

Date

Account

Debit

Credit