M. Smuts showed a net income of $5,250. The entry to close the Income Summary account would include a
A) debit to M. Smuts Capital, $5,250.
B) credit to M. Smuts Capital, $5,250.
C) debit to Income Summary, $5,250.
D) Both B and C are correct.

Question

Quizplus · Accepted Answer

The correct entries to close the Income Summary account after showing a net income involve crediting M. Smuts Capital to increase the owner's equity by the net income amount ($5,250) and debiting the Income Summary account to zero it out, reflecting the transfer of net income to the owner's capital account.

M Smuts Showed a Net Income of $5,250