Closing Entries entries that transfer the revenues expenses and Dividends

Closing entries entries that transfer the revenues

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Closing Entries: entries that transfer the revenues, expenses, and Dividends balances to the Retained Earnings account to prepare the company’s books for the next period Income Summary: a temporary account into which revenues and expenses are transferred prior to their final transfer into the Retained Earnings account. Summarizes net income (or net loss) for the period. How do we prepare a post-closing trial balance?
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Post-Closing Trial Balance: a list of the accounts and their balances at the end of the period after journalizing and posting the closing entries. It should include only permanent accounts What is the Accounting Cycle? Accounting Cycle: the process by which companies produce their financial statements for a specific period How do we use the current ratio to evaluate business performance? Current Ratio: measures the company’s ability to pay current liabilities from current assets. Current ratio = Total current assets / Total current liabilities Accounting with a Reversing Entry Reversing Entry: a special journal entry that eases the burden of accounting for transactions in the next period. Such entries are the exact opposite of a prior adjusting entry
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  • Fall '14
  • CarolRowey
  • Balance Sheet, Generally Accepted Accounting Principles, 12 months, one year

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