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Basic Bookkeeping Workshop Day 5 9
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Accounting Cycle ReviewLecture1.1
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Step 5: Prepare an Unadjusted Trial BalanceLecture1.2
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Step 6: Adjust the EntriesLecture1.3
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Adjusting Entries Category 1. Accrued ExpensesLecture1.4
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Adjusting Entries Category 2. Accrued RevenuesLecture1.5
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Adjusting Entries Category 3. Unused SuppliesLecture1.6
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Adjusting Entries Category 4. Unearned RevenuesLecture1.7
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Day 4: Challenge & RecapLecture1.8
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Day 5: Challenge / AssignmentLecture1.9
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Basic Bookkeeping Workshop Day 6 7
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Accounting Cycle ReviewLecture2.1
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Adjusting Entries Category 5. Depreciation of Property & EquipmentsLecture2.2
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Adjusting Entries Category 6. Prepaid ExpensesLecture2.3
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Adjusting Entries Category 7. Bad DebtsLecture2.4
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ActivityLecture2.5
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Day 5: Challenge & RecapLecture2.6
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Day 6: Challenge / AssignmentLecture2.7
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Basic Bookkeeping Workshop Day 7 7
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Introduction (What is Accounting?)Lecture3.1
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Accounting Cycle ReviewLecture3.2
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Day 6 Assignment Answers (Adjusting Entries at December 31, 2006)Lecture3.3
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Closing EntriesLecture3.4
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Challenge Day 6Lecture3.5
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Challenge Day 7Lecture3.6
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Question and AnswerLecture3.7
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Basic Bookkeeping Workshop Day 8 7
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Accounting Cycle ReviewLecture4.1
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Step 8: Close the EntriesLecture4.2
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Step 9: Post-Closing Trial BalanceLecture4.3
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Prepare Reversing EntriesLecture4.4
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Financial StatementsLecture4.5
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Day 7: Challenge & RecapLecture4.6
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Day 8: Challenge / AssignmentLecture4.7
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Basic Bookkeeping Workshop Day 9 8
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Accounting Definition (Recap)Lecture5.1
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Accounting Cycle ReviewLecture5.2
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Financial Statements ReviewLecture5.3
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Review of Internal Control SystemLecture5.4
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Five Components of Internal ControlLecture5.5
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Day 8 Challenge (Answers) (Chart of Accounts)Lecture5.6
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Special TopicsLecture5.7
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Question and AnswerLecture5.8
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2 Comments
The income summary account shouldn’t be included in the Chart of Accounts because it’s just a temporary account used for closing revenues and expenses for a given accounting period, and then any resulting profit or loss will then be transferred to the company’s retained earnings account. This serves to provide an audit trail that will show the company’s net, expenses, and revenue for a given calendar or fiscal year.
Source:
https://corporatefinanceinstitute.com/resources/accounting/income-summary/
https://www.accountingtools.com/articles/what-is-the-income-summary-account.html
Based on what I’ve read and my own opinion, the Income Summary account isn’t and shouldn’t be included in charts of accounts. Since the income summary account is only meant to be used temporarily, it should be used for closing records of revenue and expense accounts that are compiled at the end of an accounting period. This indicates that each income statement account’s value is debited from the temporary accounts and credited to the income summary account as one value. Therefore, the account is not strictly required. On the other hand, it can offer a useful audit trail that shows how these amounts were transferred to retained earnings.
Refereces:
– https://accountingsuperpowers.com/bookkeeping/chart-of-accounts/
– https://www.investopedia.com/terms/c/chart-accounts.asp
– https://www.accountingtools.com/articles/what-is-the-income-summary-account.html
– https://corporatefinanceinstitute.com/resources/accounting/income-summary/