After closing the revenue and expense accounts, Income Summary showed a debit balance of $2,500. Which of the following statements is TRUE?
A) The company had a net loss of $2,500.
B) The company had a net income of $2,500.
C) The company's cash increased $2,500.
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

A debit balance in the Income Summary means that expenses exceeded revenues, resulting in a net loss of $2,500.

After Closing the Revenue and Expense Accounts, Income Summary Showed