Which of the following is a true statement about closing the books of a proprietorship?
A) Expenses are closed to the Expense Summary account.
B) Only revenues are closed to the Income Summary account.
C) Revenues and expenses are closed to the Income Summary account.
D) Revenues, expenses, and the owner's drawing account are closed to the Income Summary account.

Question

Quizplus · Accepted Answer

In a proprietorship, both revenues and expenses are closed to the Income Summary account. This account is then used to calculate the net income or net loss of the business for the period. The owner's drawing account is not closed to the Income Summary account as it represents the owner's personal withdrawals and is not an expense of the business.

Which of the Following Is a True Statement About Closing