What is the primary purpose of the income summary account in the closing process?
Recording the Closing Process - Financial Accounting

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5 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
To record all transactions for the year
To summarize revenues and expenses
To track cash flow
To calculate total assets
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How do you close an expense account with a debit balance of $27,000?
Debit the income summary by $27,000
Credit the income summary by $27,000
Credit the expense account by $27,000
Debit the expense account by $27,000
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the result of debiting a revenue account by its balance?
The account balance increases
The account balance remains the same
The account balance becomes zero
The account balance doubles
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the next step after closing the income summary account?
Close it to the liabilities account
Close it to the cash account
Close it to the retained earnings account
Close it to the capital account
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why is retained earnings considered a permanent account?
It is closed at the end of each period
It is used to track daily transactions
It is reset to zero each year
It accumulates net income over time
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