The Balance In The Income Summary Account Before It is Closed Will Be Equal To What?

What Is The Balance In Income Summary Will Be, After The Revenue And Expense Accounts Have Been Closed?

The Carried Down Balance (Balance c/d) in the Income Summary Account before it is closed will always be equal to the Net Income Or Net Profit of Income Statement / Trading & Profit And Loss Account, otherwise, you did a mistake or an error in preparing the income summary account.

Actually, the income summary account is a summary of all revenues and expenses accounts transferred from income statement. So, the difference between revenues and expenses resulting either a net income / net profit or a net loss.

When revenue accounts exceeds expense accounts, the resulting figure will be net income and when expenses are more than revenue accounts, then the business faces loss during that accounting period.

For example, if your income statement shows you the net income of Rs. 10 million, for a accounting then the balance in income summary account must also be equal to that net income (e.g., Rs. 10 Million) for that particular accounting period.