Question

What is the name of the account that is debited for expenses and credited for revenues and whose balance will represent either the net loss or net income for the period?

a. Capital
b. Income Summary
c. Withdrawals
d. Revenue

Answer 1

The Income Summary account is debited for expenses, credited for revenues, and its balance shows the net income or net loss for the accounting period.

Step-by-step explanation:

The name of the account that is debited for expenses and credited for revenues and whose balance will represent either the net loss or net income for the period is called the Income Summary account. This account is a temporary account used during the closing process in accounting where all of the year's operating revenues and expenses are compiled to calculate the net income or net loss of the business. Once determined, the balance of the Income Summary account (either a net income or a net loss) is then transferred to the Owner's Capital account.