Question

when revenue is greater than total expenses, resulting in a net income, the income summary account has a

Answer 1

The Income Summary account has a credit balance when revenue exceeds total expenses, producing a net profit, as indicated by the T account.

The outcome is net when revenue exceeds expenses.

A corporation will record a net profit if its revenue exceeds its costs. It will record a net loss if its expenses outweigh its income.

What happens if total revenue exceeds total expenses?

The business makes a net profit when revenues are higher than costs.

If the revenue for an accounting cycle is more than the expenses, what is the final entry for the income summary account?

The closing entry involves debiting income summary and crediting retained earnings if a company's sales exceed its expenses. If the period results in a loss, the income summary account must be credited and retained earnings must be debited.

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