Income Summary Account a. What is the purpose of the Income Summary account b. How does

Chapter 10, Problem 2

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QUESTION:

Income Summary Account

a. What is the purpose of the Income Summary account?

b. How does the Income Summary account differ from the other temporary accounts?

Questions & Answers

QUESTION:

Income Summary Account

a. What is the purpose of the Income Summary account?

b. How does the Income Summary account differ from the other temporary accounts?

ANSWER:

                                                                  Step 1 of 3

Income summary is a temporary account in which all the revenue and expenses accounts are transferred to at the end of the accounting period. The resulting balance is considered as a profit or loss that is then transferred to capital account.

                                                                 

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