What is the journal entry to close the income summary account showing a profit?

• A. Debiting Income Summary and crediting the owner's capital account
• B. Debiting the owner's capital account and crediting Income Summary
• C. Debiting Revenue and crediting Income Summary
• D. Debiting cash and crediting Income Summary

Answer: (A)

When there is a profit, the closing process transfers net income from the Income Summary to the owner's capital, increasing the owner's equity. Since Income Summary has a credit balance equal to net income after closing revenues and expenses into it, the correct final closing entry is to debit Income Summary and credit the owner’s capital. This zeros Income Summary and records the profit as an increase in the owner's investment. The other options either reflect earlier closing steps (closing revenues or expenses to Income Summary) or would not correctly affect the Income Summary or capital balance.