The Income Summary account has a credit balance of $25,000 after the revenue and expense accounts have been closed. Which of the following is to be credited to close the Income Summary account?
A)Owner's Name, Withdrawals
B)Sales Revenue
C)Cost of Goods Sold
D)Owner's Name, Capital

Question

Quizplus · Accepted Answer

The Income Summary account is closed to the Owner's Capital account to transfer the net income or loss to the owner's equity. Since the Income Summary has a credit balance, it indicates a net income, which should be credited to the Owner's Capital account.

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