After posting the second closing entry to the income summary account, the balance will be equal to
A) zero
B) stockholders' equity
C) revenues for the period
D) the net income or net loss for the period

Question

Quizplus · Accepted Answer

The purpose of the income summary account is to close all the revenue and expense accounts and transfer their balances to the income summary account. After posting the second closing entry to the income summary account, the balance will represent the net income or net loss for the period. Therefore, the correct answer is (D) the net income or net loss for the period.

After Posting the Second Closing Entry to the Income Summary