Usual Or Normal Balance Of Income Summary Account

The normal, positive, favourable or usual balance of Income Summary Account is credit balance because usually revenues exceeds expenses accounts during the accounting period for a profitable business. The credit balance represents the Net Profit or Net Income of the business for the current accounting period.

On the other hand, the negative, unfavourable or unusual balance of income summary account is debit balance resulting a net loss for the business.

As income summary account is a temporary account, so we close it to retained earnings account according to its credit balance or debit balance that must match with the Income Statement’s balance.

So, we can say that income summary either has a credit balance usually or a debit balance unusually and we close it according to the basis of its balance.