The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: The entry to close Income Summary to Retained Earnings includes
A)a debit to Revenues for $7,000.
B)credits to Expenses totalling $5,700.
C)a credit to Income Summary for $1,300
D)a credit to Retained Earnings for $1,300.

Question

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information:  The entry to close Income Summary to Retained Earnings includes
A)a debit to Revenues for $7,000. 
B)credits to Expenses totalling $5,700. 
C)a credit to Income Summary for $1,300 
D)a credit to Retained Earnings for $1,300.

Quizplus · Accepted Answer

Income Summary is a temporary account used to summarize revenues and expenses for the period. At the end of the period, the balance of Income Summary is transferred to Retained Earnings (for corporations) or Owner's Equity (for sole proprietorships). Since Camera Obscura Enterprises had a net income of $1,300 for the month, the entry to close Income Summary to Retained Earnings would include a credit to Retained Earnings for $1,300.

The Income Statement for the Month of June, 2015 of Camera