When a loss is closed into the partners' Capital accounts, Income Summary is credited.

Name: When a loss is closed into the partners' Capital accounts, Income Summary is credited.
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When a loss is closed into the partners' Capital accounts, Income Summary is credited to reflect the reduction in the company's net income or profit. This reduces the balance of the Income Summary account and distributes the loss to the partners' Capital accounts in proportion to their ownership percentages.

When a Loss Is Closed into the Partners' Capital Accounts