The Income Summary Account

B

The Income Summary account is a temporary account created especially for the closing process and is used only for flowing adjustments and closing entries through.

The correct answer is B. All of these answers are correct.

Let's break down each answer choice and provide a detailed explanation:

A. The Income Summary account is used to facilitate the closing process: At the end of an accounting period, companies need to close their revenue and expense accounts to determine their net income or loss. The Income Summary account acts as a temporary holding account during this closing process. It allows for the transfer of revenue and expense balances from their respective accounts to the Income Summary account, which is then used to calculate the net income or loss for the period.

B. All of these answers are correct: This answer choice indicates that all of the provided answers (A, C, and D) are correct. We have already explained answers A and D. Let's move on to answer C.

C. The Income Summary account is a temporary account: The Income Summary account is indeed a temporary account. Temporary accounts are used to record transactions and events that occur during a specific accounting period. They are closed at the end of the period, meaning their balances are transferred to other accounts, such as retained earnings. The Income Summary account's purpose is to facilitate the closing process by temporarily holding revenue and expense balances before they are closed out.

D. The Income Summary account should have a zero balance at period-end: This answer is also correct. By the end of the closing process, the balances in the Income Summary account should be transferred to the appropriate permanent accounts, such as retained earnings. This transfer ensures that the Income Summary account has a zero balance at the end of the accounting period. The purpose of this step is to start the next accounting period with a clean slate, allowing for the accumulation of new revenue and expense balances.

In conclusion, the Income Summary account serves as a temporary account that facilitates the closing process. It should have a zero balance at the end of the accounting period, as its balances are transferred to other accounts. Therefore, answer B is the correct choice.