How To Close Income Summary Account With Net Loss Or Net Profit Journal Entry
Income Summary Account is closed to Retained Earnings Account . In case of N et Loss we need to credit it and deb it retai ned earnings account as income summary account has a de b it b ala nce so to close it we need to credit it and deb it retai ned earnings account in order to transfer net loss from income summary account to retained earnings account. The journal entry to close income summary when there is a net loss is: Retained Earnings a/c XXX Income Summary a/c XXX (Income Summary Accou n t Closed to Retai n ed Ear n i n gs Or N et Loss Transferred to Retained Earnings Account)...