Which of the following is a true statement about closing the books of a proprietorship?
A) Expenses are closed to the owner's drawings account.
B) Only revenues are closed to the Income Summary account.
C) Only revenues and expenses are closed to the Income Summary account.
D) Revenues, expenses, and the owner's drawings account are closed to the Income Summary account.

Question

Quizplus · Accepted Answer

Revenues and expenses are closed to the Income Summary account to calculate the net income or loss for the period. This amount is then transferred to the owner's capital account, not the drawings account. The owner's drawings are directly closed to the owner's capital account, not through the Income Summary.

Which of the Following Is a True Statement About Closing