Question

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. the entry to close the income summary account will be:_________

Answer 1

If after preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. the entry to close the income summary account will be:  a debit of $25,000 to owner capital.

Income summary

The debit balance  of the amount of $25,000 in the income summary indicate that the company expenses is higher than the revenues generated by the company by $25,000.

Based on this the loss incurred will be taken out of the company  owner's equity  account by reducing it through a debit entry.

Therefore  the income summary account has a debit balance of $25,000. the entry to close the income summary account will be:  a debit of $25,000 to owner capital.

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