What type of account is income summary?
Understand the Problem
The question is asking for a classification of the income summary account in accounting. The income summary account is used to summarize the revenues and expenses for a period before their balances are transferred to the capital account.
Answer
Temporary account
The income summary is a temporary account used during the closing process.
Answer for screen readers
The income summary is a temporary account used during the closing process.
More Information
The income summary account is specifically designed to be cleared out at the end of each period, transferring its balance to retained earnings or owner's equity.
Sources
- Income Summary Account - AccountingTools - accountingtools.com
- What is the income summary account? | AccountingCoach - accountingcoach.com
- What is an Income Summary Account and How to Calculate It? - highradius.com
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