The statement relating to the Profit and Loss Summary Account that is incorrect is:

Question

Quizplus · Accepted Answer

The Profit and Loss Summary Account is a temporary account that is used to summarize the balances in the income and expense accounts for a specific accounting period. At the end of the period, the balance in the Profit and Loss Summary Account is transferred to the owner's Capital account or retained earnings account, and the account is closed. Therefore, option D stating that the Profit and Loss Summary Account is a permanent account is incorrect.

The Statement Relating to the Profit and Loss Summary Account