When closing the Income Summary account when there is a net loss:
A) Capital would increase.
B) Capital would decrease.
C) Capital would remain the same.
D) Revenue would decrease.

Question

Quizplus · Accepted Answer

When there is a net loss, the Income Summary account is closed to the Capital account, resulting in a decrease in the Capital account. This reflects the reduction in equity due to the loss.

When Closing the Income Summary Account When There Is a Net