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

Question

Quizplus · Accepted Answer

The purpose of the income summary account is to summarize the revenues and expenses for the period and transfer the balance to retained earnings. After posting the second closing entry, which debits or credits the income summary account for the balance of the revenues and expenses, the balance of the income summary account will be equal to the net income or (loss) for the period. Therefore, the correct answer is D.

After Posting the Second Closing Entry to the Income Summary