If Income Summary has a credit balance after revenues and expenses have been closed into it the closing entry for Income Summary will include a
A) debit to the owner's capital account.
B) debit to the owner's drawings account.
C) credit to the owner's capital account.
D) credit to the owner's drawings account.

Question

Quizplus · Accepted Answer

If Income Summary has a credit balance, it means that revenues exceeded expenses, resulting in net income. To close the Income Summary account, a credit must be made to the owner's capital account, representing the transfer of net income to the owner's equity. Therefore, the correct choice is C.

If Income Summary Has a Credit Balance After Revenues and Expenses