Which of the following accounts would be closed to the income summary at year-en

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Question: Which of the following accounts would be closed to the income summary at year-end?

Options:

Correct Answer: Revenue

Solution:

Revenue accounts are closed to the income summary at year-end to determine the net income for the period.

Which of the following accounts would be closed to the income summary at year-end?

Which of the following accounts would be closed to the income summary at year-end?

Step 1: Understand that at the end of the year, businesses need to summarize their financial performance.
Step 2: Identify that revenue accounts show how much money the business earned during the year.
Step 3: Know that to find out the net income, we need to close these revenue accounts.
Step 4: Closing means transferring the total amount from the revenue accounts to a temporary account called the income summary.
Step 5: This process helps in calculating the total profit or loss for the year.

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