Income Summary
Income Summary (hereinafter, the Account) is a temporary account in the ledger that summarizes revenue and expenses and transfers the balance (either net income or net loss) to Owner's Capital. This account does not have a normal balance (i.e., it could have either a debit or a credit balance).
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Income Summary. A temporary account in the ledger that summarizes revenue and expenses and transfers the balance (either net income or net loss) to Owner's Capital. This account does not have a normal balance (i.e., it could have a debit or a credit balance).
Related concepts
- Bookkeeping. Recording, filing, and retrieving of financial data, as well as producing those financial reports that are required by laws.
- Income. Money that is earned by a business through the sale of products or services.
- Profit. The difference between income earned and expenses paid. The greater the profit the better for business.
