Question: Which of the following accounts will not be closed to income summary?
If you are preparing closing entries for your accounting records, you might wonder which accounts will not be closed to income summary. Income summary is a temporary account that summarizes the revenues, expenses, gains and losses of a period. It is used to transfer the net income or loss to the owner's equity or retained earnings account.
The accounts that will not be closed to income summary are the permanent accounts, such as assets, liabilities and equity. These accounts carry their balances over to the next period and are not affected by the closing process. The only exception is the dividends account, which is a temporary account that reduces retained earnings and is closed directly to it, not to income summary.
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