Which of the following accounts has a 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

Income Summary account is used to summarize all the revenue and expense accounts at the end of an accounting period. Its balance is equal to net income before it is closed. This balance is then transferred to the owner's equity account such as Owner, Capital or retained earnings. Therefore, the balance of Income Summary account represents net income for the period.

Which of the Following Accounts Has a Balance Equal to Net