To close net income to retained earnings, Income Summary is debited and Retained Earnings is credited.

Name: To close net income to retained earnings, Income Summary is debited and Retained Earnings is credited.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is the correct journal entry to close net income to retained earnings at the end of an accounting period. Income Summary is a temporary account used to summarize revenue and expense accounts, and closing it to Retained Earnings updates the company's equity section on the balance sheet.

To Close Net Income to Retained Earnings, Income Summary Is