The entry to close Income Summary (net loss) was entered in reverse-Income Summary was debited and Capital was credited. This error will cause:
A) Income Summary to have a credit balance.
B) Income Summary to have a debit balance.
C) the assets to be overstated.
D) the liabilities to be understated.

Question

Quizplus · Accepted Answer

When the entry to close Income Summary is reversed, Income Summary is debited instead of credited, resulting in a debit balance instead of being zeroed out.

The Entry to Close Income Summary (Net Loss) Was Entered