The Income Summary account is used:
A)To adjust and update asset and liability accounts.
B)To close the revenue and expense accounts.
C)To determine the appropriate dividend amount.
D)In some situations to replace the income statement.
E)To replace the retained earnings account in some businesses.

Question

Quizplus · Accepted Answer

The Income Summary account is used to close the revenue and expense accounts at the end of an accounting period. The balances of the revenue and expense accounts are transferred to the Income Summary account, which is then closed to retained earnings or owner's equity.

The Income Summary Account Is Used