The first step to preparing closing journal entries is to close the credit balance on the income statement to the Retained Earnings account.

Name: The first step to preparing closing journal entries is to close the credit balance on the income statement to the Retained Earnings account.
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The first step in preparing closing journal entries is to close revenue accounts to the Income Summary account, not directly to Retained Earnings.

The First Step to Preparing Closing Journal Entries Is to Close