Verify Income Summary and post-closing balances

Reconcile the optional holding account

Income Summary is one closing method, not a financial-statement line. Close revenue into it, close expenses into it, and compare the resulting balance with net income from the same adjusted balances. A profitable period creates a credit balance; a loss creates a debit balance. Transfer that net amount to Retained Earnings. Close owner distributions separately.

Direct closing entries can reach the same ending Retained Earnings without Income Summary. Whichever method is used, preserve the method and require the same controlled endpoint.

Test the next period's opening balances

The post-closing trial balance contains permanent asset, liability, and equity balances. Revenue, expense, distribution, and Income Summary balances must be zero. Review which accounts remain, then verify equal totals. An offsetting error can leave the columns equal while a temporary account remains open.

Tie ending Retained Earnings to opening Retained Earnings plus net income less owner distributions and other supported changes. Reconcile balance-sheet presentation separately because contra accounts can appear as separate ledger lines but net within a statement caption.

Exit check

Explain why Income Summary must be zero after closing and why it never appears on a financial statement. Then explain why equal post-closing columns do not prove that all temporary accounts were closed.