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What is Income Summary?
A temporary account in the ledger that summarizes Revenue and Expenses and transfers its balance to Capital.
What are the Income Summary Steps
- 1. Clear Revenue balances and transfer to Income Summary
- 2. Clear individual Expense balances and transfer to Income Summary
- 3.Clear balance in Income Summary (net income) and transfer to Capital
- 4. Clear Withdrawals balance and transfer it to Capital.
Accumulated Amortization is a Contra-Asset account with a credit balance.
Amortization Expense ∧ DR
Accumulated Amortization ∧ CR
Formula for Accumulated Amortization
- Cost of Equip - Residual Value
How to replenish Petty Cash Fund
Here are closing entries for Income Summary