For a merchandising company, all accounts that affect the determination of income are closed to the Income Summary account.

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In a merchandising company, accounts such as Sales, Cost of Goods Sold, and Operating Expenses that affect the determination of income are closed to the Income Summary account at the end of the accounting period. This is done before transferring the balance in Income Summary to the Retained Earnings or Owner's Equity account.

For a Merchandising Company, All Accounts That Affect the Determination