True or False a To close net income to owners capital Income

True or False:

a) To close net income to owner’s capital, Income Summary is debited and Owner’s Capital is credited.

b) Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

Solution

a True, To close net income to owner’s capital, Income Summary is debited and Owner’s Capital is credited. The balance of income summary account is closed to Zero. b False, correcting entries and adjusting entries always may or may not affect at least one balance sheet account and one income statement account.