Income Summary Appears On Which Financial Statement

Income Summary Account In Financial Statement

Income Summary Account does not appear in any Financial Statement as it is a Temporary Account which is finally closed to Retained Earnings at the time of recording Closing Entries which is a Step of Accounting Cycle.

Basically, income summary is prepared on temporary basis after preparing Financial Statements in order to calculate net income / net loss for the period or to close revenues and expenses. It is internally recorded by the company’s accountant.

So, Income Summary Account does not appear on any financial statement because, it is mainly prepared on temporary basis after all financial statements are prepared in order to close all temporary accounts i.e., transfer the difference of revenues and expenses accounts to Retained Earnings Account for the period and also to find out the summary of revenues and expenses so that the net income calculated under this summary account must be equal to the net income of Income Statement that is why it is not shown on any financial statement.