The Income Summary account balance should always increase after the closing entries are posted at the end of the accounting period.

Question

Quizplus · Accepted Answer

The Income Summary account balance is used to transfer the net income or net loss to the retained earnings account. If the company has a net income, the Income Summary account balance will be a credit, and if the company has a net loss, the balance will be a debit. In either case, the Income Summary account balance will decrease to zero after the closing entries are posted, not increase.

The Income Summary Account Balance Should Always Increase After the Closing