Chapter 4, Problem 29Q

To determine

Income Summary account: Income summary is a temporary account prepared while closing the revenue accounts and the expense accounts, and the balance from it is transferred to the Retained Earnings account.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

• Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
• Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Identify: The data that will be summarized in Income Summary Account