TIP: A nominal account with a credit balance is closed by a debit to that account and a credit to. Income Summary. A nominal account with a debit balance is closed by a credit to that account and a debit to lncome Summary. The Income Summary account is closed to. an owners' equity account (Retained Earnings far a corporation) and is often called the Revenue and Expense Summary. CHAPTER 3 REVIEW OF THE ACCOUNTING PROCESS The word "accrued" is not needed in either account title, but it could be used in the liability account title if desired (the account title would then be Accrued Salaries Payable). It would be wrong to insert the. word ·"accrued" in the expense account title. Same people simply call the credit account "Accrued Salaries" (rather than "Salaries Payable") but we advise that you include the key ward "Payable" and omit the unnecessary ward "Accrued." TIP: The cost of most long-lived tangible assets is allocated to expense in a systematic and rational manner. The entry .to record the expiration of cost due to the consumption of benefits yielded by
This is the end of the preview. Sign up
access the rest of the document.