After posting the entries to close all revenue accounts and all expense accounts, the Income Summary account of Waif Services has a $4,000 debit balance. This shows that Waif Services earned profit of $4,000.

Question

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The Income Summary account with a debit balance of $4,000 indicates that the total expenses for Waif Services exceeds its total revenue, resulting in a net loss of $4,000, not a profit.

After Posting the Entries to Close All Revenue Accounts and All