The accountant of Randy's Flooring has closed all of the temporary income statement accounts.The accountant is now ready to close the Income Summary account.Using the Income Summary T-account below,determine the correct closing entry the accountant needs to make in order to close the account.

Question

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The Income Summary account has a credit balance of $23,500, which represents the company's net income for the period. In order to close this account, the accountant needs to debit the account for the same amount and credit the Retained Earnings account in order to transfer the net income to the company's equity. Therefore, the correct closing entry is: Debit Income Summary $23,500 and Credit Retained Earnings $23,500. This is depicted in option C.

The Accountant of Randy's Flooring Has Closed All of the Temporary