The entry to close the Income Summary account may include:
A)a debit to Income Summary and a credit to Cash.
B)a debit to Income Summary and a credit to the owner's drawing account.
C)a debit to Cash and a credit to Income Summary.
D)a debit to Income Summary and a credit to the owner's capital account.

Question

Quizplus · Accepted Answer

The entry to close the Income Summary account transfers the net income or loss from the Income Summary account to the owner's capital account. This is done by debiting Income Summary and crediting the owner's capital account. Therefore, the correct choice is D - a debit to Income Summary and a credit to the owner's capital account.

The Entry to Close the Income Summary Account May Include