The Income summary account has a $25,000 credit balance after the revenue and expense accounts have been closed.To which account is this balance closed?

Question

Quizplus · Accepted Answer

The Income summary account is used to close revenue and expense accounts at the end of a period, and the resulting balance is transferred to the owner's Capital account, which represents the owner's equity in the business. Therefore, the balance of $25,000 in the Income summary account would be closed to the Capital account.

The Income Summary Account Has a $25,000 Credit Balance After