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Slide34 - Closing the Accounts C1 Transaction Clerical...

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Unformatted text preview: Closing the Accounts C1- Transaction: Clerical procedure of transferring the ending balances of revenue accounts to the Income Summary account Analysis : The stockholders' equity account Sales decreases to zero The stockholders' equity account lncorne Summary increases Journal Entry: Sales ........................... 160,000 Income Summary ...... 160,000 C2- Transaction: Clerical procedure of transferring the ending balances of expense accounts to the Income Summary account Analysis : The negative stockholders' equity (expense) accounts Cost of Goods Sold, Rent Expense, etc- decrease to zero The stockholders' equity account lncorne Summary decreases Journal Entry: Income Summary ............... 102,100 Cost of goods sold .......... 100,000 Rent expense ................ 2,000 Depreciation expense ______ 100 ...
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