Week 3 Closing Process

Week 3 Closing Process - 1 Closing Process Resets revenue,...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
12/10/10 Resets revenue, expense and withdrawal account balances to zero at the end of the period. Helps summarize a period’s revenues Identify accounts for closing. Record and post closing entries. Prepare post-closing trial balance. Closing Process C 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
12/10/10 Tempo rary Accoun ts Revenue s Income Summar y Expense s Withdra wals Perman ent Account s Assets Liabilitie Owner’s Capital The closing process applies only to temporary accounts. Temporary and Permanent Accounts C 1
Background image of page 2
Let’s see how the closing process works! Recording Closing Entries ± Close Revenue accounts to Income Summary. ² Close Expense accounts to Income Summary. ³ Close Income Summary account to Owner’s Capital. ´ Close Withdrawals to P 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
12/10/10 Balances before closing. Income Summary Owner's Capital 30,000 30,000 Revenue Accounts 25,000 25,000 Withdrawals Account 5,000 5,000 Expense Accounts 10,000 10,000 Closing Process P 2
Background image of page 4
12/10/10 Income Summary 25,000 25,000 ΠClose Revenue accounts to Income Summary. Owner's Capital 30,000 30,000 Revenue Accounts 25,000 25,000 - Withdrawals Account 5,000 5,000 Expense Accounts 10,000 10,000 Closing Process P 2
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
12/10/10 Income Summary 10,000 25,000 15,000 Owner's Capital 30,000 30,000 Revenue Accounts 25,000 25,000 - Withdrawals Account 5,000 5,000 ± Close Expense accounts to Income Summary. Expense Accounts 10,000 10,000 - Closing Process The balance in Income Summary equals net income. P 2
Background image of page 6
12/10/10 Owner's Capital 30,000 15,000 45,000 Owner's Capital 30,000 15,000 45,000 Withdrawals Account 5,000 5,000 Withdrawals Account 5,000 5,000 ± Close Income Summary to Owner’s Capital.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 23

Week 3 Closing Process - 1 Closing Process Resets revenue,...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online