Question

Review and complete the following statement regarding the Income Summary account. The Income Summary account is (debited/credited) for the sum of all revenue accounts and is (debited/credited) for the sum of all expense accounts and its balance will be transferred to the (Retained Earnings/Cash) account.

Answer 1

Answer:

Credited , Debited, and Retained Earnings

Explanation:

The closing entries are presented below:

1. Revenue A/c Dr XXXXX

              To Income summary A/c XXXXX

(Being the revenue account is closed)

2. Income summary A/c Dr XXXXX

            To Expenses A/c XXXXX

(Being the expenses are closed)

3. Income summary A/c Dr XXXXX

          To Retained earnings A/c XXXXX

(Being the difference i.e net profit  is recorded)