Asset and liability accounts are closed to the Income Summary account. Solution In accounting, we often refer to the process of closing as closing the books. Only revenue, expense, and dividend accounts are closed—not asset, liability, Common Stock, or Retained Earnings accounts. The four basic steps in the closing process are:.

1. Asset and liability accounts are closed to the Income Summary account.
Solution
In accounting, we often refer to the process of closing as closing the books. Only revenue,
expense, and dividend accounts are closed—not asset, liability, Common Stock, or Retained
Earnings accounts. The four basic steps in the closing process are: