After posting the second closing entry to the income summary account, the balance will be equal to
A) zero.
B) owner's equity.
C) revenues for the period
D) the net income or (loss) for the period.

Question

Quizplus · Accepted Answer

The purpose of the income summary account is to calculate the net income (or loss) for the period. After posting the second closing entry, which transfers the balance of the revenue and expense accounts to the income summary account, the balance of the income summary account will represent the net income (or loss) for the period. Therefore, the correct answer is D.

After Posting the Second Closing Entry to the Income Summary