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    myaline1987's Avatar
    myaline1987 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Oct 11, 2009, 11:01 PM
    Can someone give me an explanation! Thanks
    After preparing and posting the closing entries to close revenues and expenses into the income summary, the income summary account has a debit balance of $33,000. The entry to close income summary account will include:
    A. a debit of $33,000 to owner withdrawals.
    B. a credit of $33,000 to owner withdrawals.
    C. a debit of $33,000 to income summary
    D. a debit of $33,000 to owner capital
    E. a credit of $33,000 to owner capital
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #2

    Oct 12, 2009, 12:08 PM

    When an income summary has a debit balance, it means there is net loss for the period. Since the profit or loss belongs to the owner, the obvious choice is to transfer it owner's capital account
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