Question

Jones showed a net income of $15,000. The entry to close the income summary account would include:

a. Debit Income Summary $15,000, Credit Capital $15,000
b. Debit Capital $15,000, Credit Income Summary $15,000
c. Debit Income Summary $15,000, Credit J. Jones, Withdrawals $15,000
d. Debit J. Jones, Withdrawals $15,000, Credit Income Summary $15,000

Answer 1

The correct entry to close the income summary account when Jones showed a net income of $15,000 would be to Debit Income Summary $15,000 and Credit Capital $15,000.

Step-by-step explanation:

The correct entry to close the income summary account when Jones showed a net income of $15,000 would be:

Debit Income Summary $15,000, Credit Capital $15,000

This entry is made to transfer the net income from the income summary account to the owner's capital account. By debiting Income Summary, we reduce its balance by the amount of net income, and by crediting Capital, we increase its balance by the same amount. This reflects the transfer of the net income to the owner's capital account.