When Income Summary has a credit balance and the account is closed:
A) Capital is decreased.
B) Capital is increased.
C) Withdrawals is increased.
D) Revenue is decreased.

Question

Quizplus · Accepted Answer

When Income Summary has a credit balance, it indicates that the company has earned a profit. Closing this account to the owner's capital account increases the capital, reflecting the addition of net income to the owner's equity.

When Income Summary Has a Credit Balance and the Account