Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 22 - No. 7)
Which of the following best describes the Income Summary account?
A permanent account used to record income and expenses.
A temporary account used to summarize revenues and expenses before transferring to retained earnings.
An asset account used to record all income and expenses.
A liability account used to track unearned revenue.
Explanation
The Income Summary is a temporary account used at the end of an accounting period to close out the revenue and expense accounts and calculate the profit or loss.
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