In the process of closing entries, the Income Summary account is closed to the Capital account before Withdrawals.

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In the process of closing entries, the Income Summary account, which contains the net income or loss for the period, is closed to the Capital account to update the owner's equity. Withdrawals or drawings are closed directly to the Capital account afterwards, reflecting the owner's withdrawals from the business during the period.

In the Process of Closing Entries, the Income Summary Account