Question

Review and complete the following statement regarding the Income Summary account. The Income Summary account is (debited/credited) for the sum of all revenue accounts and is (debited/credited) for the sum of all expense accounts and its balance will be transferred to the (Capital/Cash) account.

Answer 1

credited ; debited ; retained earnings or capital account

Step-by-step explanation:

The closing entries are as follows

Sales Revenue A/c Dr XXXXX

To Income Summary XXXXX

(Being revenue account closed)

Income summary A/c Dr XXXXX

To Expenses A/c XXXXX

(Being expenses accounts are closed)

Income summary A/c Dr XXXXX

To Retained earning XXXXX

(Being the difference is credited to retained earning)