The Income Summary Account Is Also Called What?

 

Income Summary Account is also called clearing account revenue and expense summary in accounting as it is, actually, a temporary account prepared to transfer revenues and expenses accounts from Income Statement at the end of the accounting period.

It provides a summary of both revenues and expenses for the accounting period, so it is also called a revenue and expense summary account. The purpose of income summary account is to close revenues and expenses account and to calculate the net profit or net income and that net income must be equal to net income of Income Statement.

As income summary account is prepared to transfer revenues and expenses accounts to Retained Earnings Account at the end of the fiscal period, so that is why it is called a clearing account.