In a sole proprietorship the balance in the Income Summary account is closed to:
A)Retained earnings.
B)Capital.
C)Drawing.
D)Net Income.

Question

Quizplus · Accepted Answer

In a sole proprietorship, the balance in the Income Summary account, which reflects the net income or loss for the period, is closed to the owner's capital account. This process updates the capital account to reflect the business's performance over the period.

In a Sole Proprietorship the Balance in the Income Summary