The debit to Income Summary in the second closing entry represents the total expenses.

Question

Quizplus · Accepted Answer

The debit to Income Summary in the second closing entry represents the total expenses. This is because the purpose of the second closing entry is to transfer the balances of temporary accounts (revenues, expenses, gains, and losses) to the permanent capital account. By debiting Income Summary, we are effectively decreasing its balance, which represents the total amount of expenses.

The Debit to Income Summary in the Second Closing Entry