Which of the following accounts has an ending balance equal to net income immediately before it is closed?
A) Income Summary
B) Owner, Withdrawals
C) Net Income
D) Owner, Capital

Question

Quizplus · Accepted Answer

The Income Summary account is used to temporarily hold revenue and expense balances at the end of the accounting period. Once the net income or loss has been calculated, the balance in the Income Summary account is closed out to the Owner's Capital account or retained earnings account. Therefore, the ending balance of the Income Summary account should be equal to the net income before it is closed.

Which of the Following Accounts Has an Ending Balance Equal