Companies prepare an income summary and an income statement at the end of an accounting period. While an income summary is a clearing account used to close income-statement accounts at the end of a ...

The term "temporary account" refers to items found on your income statement, such as revenues and expenses. "Permanent accounts" consist of items located on the balance sheet, such as assets, owners' ...

Closing entries transfer revenue and expense balances to the retained earnings account. This process resets the temporary account balances to zero for the new accounting period. Recording closing ...