Asked by Diksha Panwar on Jun 15, 2024
Verified
The normal balance of Income Summary is:
A) debit.
B) credit.
C) The account does not have a normal balance.
D) It depends on the change of the inventory balance.
Income Summary
An account to which all revenue and expense accounts are transferred at the end of an accounting period to summarize the results of operations for that period.
Normal balance
The side of an account (debit or credit) where increases in the account are recorded, depending on the account type.
Inventory balance
The total value of all goods and materials held by a company intended for sale or production.
- Identify the normal balances for different types of accounts.
Verified Answer
LG
Lauren GarzaJun 15, 2024
Final Answer :
C
Explanation :
The Income Summary account is a temporary account used to close revenue and expense accounts. It does not have a normal balance because its balance will be zero at the beginning of each period and will only temporarily hold amounts during the closing process before being closed out itself.
Learning Objectives
- Identify the normal balances for different types of accounts.