The contra-revenue accounts,Sales Returns and Allowances and Sales Discounts,should be closed by crediting these accounts and debiting Income Summary for each account.

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Contra-revenue accounts have a natural credit balance, so they need to be credited to close them. Income Summary, on the other hand, is a temporary account that needs to be debited to transfer the net income to Retained Earnings.

The Contra-Revenue Accounts,Sales Returns and Allowances and Sales Discounts,should Be