When the balance of the Income Summary account is a debit, the entry to close this account is
A) debit Capital; credit Income Summary.
B) debit Income Summary; credit Revenue.
C) debit Revenue; credit Income Summary.
D) debit Income Summary; credit Capital.

Question

Quizplus · Accepted Answer

When the Income Summary account has a debit balance, it indicates a net loss. To close the account, you debit Capital and credit Income Summary to transfer the loss to the owner's equity.

When the Balance of the Income Summary Account Is a Debit