After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses), the income summary account has a debit balance of $33,000. The entry to close the income summary account will include:
A) a debit of $33,000 to owner withdrawals.
B) a credit of $33,000 to owner withdrawals.
C) a debit of $33,000 to income summary.
D) a debit of $33,000 to owner capital.
E) a credit of $33,000 to owner capital.

Question

Quizplus · Accepted Answer

A debit balance in the income summary account indicates a net loss. To close the income summary account and transfer the loss to the owner's capital account, a debit of $33,000 to owner capital is required. This reduces the owner's equity by the amount of the loss.

After Preparing and Posting the Closing Entries to Close Revenues