Income Summary and Capital Accounts a. Explain the relationship between the Income

Chapter 10, Problem 3

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QUESTION:

Income Summary and Capital Accounts

a. Explain the relationship between the Income Summary account and the capital account.

b. Why doesn’t the Income Summary account have a normal balance?

Questions & Answers

QUESTION:

Income Summary and Capital Accounts

a. Explain the relationship between the Income Summary account and the capital account.

b. Why doesn’t the Income Summary account have a normal balance?

ANSWER:

                                                                  Step 1 of 3

Capital account is a general ledger personal account that records owner’s contribution and retained earnings of a company traced in an accounting period.

                                                                 

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