The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:
A) Income Summary account.
B) Closing account.
C) Balance column account.
D) Contra account.
E) Nominal account.

Question

Quizplus · Accepted Answer

The Income Summary account is used in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account. This allows for a clear separation of the current period's revenues and expenses from those of the previous period, and ensures that the owner's equity section reflects only the current period's activities.

The Special Account Used Only in the Closing Process to Temporarily