Final answer:
The Income Summary account is used in the closing process of an accounting period to summarize revenues and expenses, whereas the Income Statement is a financial report for a specific period. The Income Summary allows transfer of net income or loss to retained earnings.
Step-by-step explanation:
The purpose of the Income Summary account is to collect the balances of all temporary income and expense accounts at the end of an accounting period. It summarises a company's revenues and expenses for that period, allowing the net income or loss to be easily transferred to the retained earnings in the general ledger. The Income Summary account is different from the Income Statement because while the Income Statement is a financial report showing a company's performance over a specific period, the Income Summary is an account within the general ledger used in the closing process to facilitate the transfer of net income or loss to retained earnings.