Chapter 8 Recording Adjusting and Closing Entries for a Service Business Accounting February 2014.
Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting &...
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Transcript of Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting &...
![Page 1: Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting & Closing Entries to the Ledger Journalize the Adjusting.](https://reader036.fdocuments.in/reader036/viewer/2022082620/5a4d1b107f8b9ab05998ed27/html5/thumbnails/1.jpg)
Closing Entries Chapter 9.3 & 9.4
![Page 2: Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting & Closing Entries to the Ledger Journalize the Adjusting.](https://reader036.fdocuments.in/reader036/viewer/2022082620/5a4d1b107f8b9ab05998ed27/html5/thumbnails/2.jpg)
We’re almost done, let’s finish it up!
Post the Adjusting &
Closing Entries to the
Ledger
Journalize the
Adjusting &Closing
Entries
Prepare the Post-Closing Trial Balance
Step 7 Step 8 Step 9
![Page 3: Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting & Closing Entries to the Ledger Journalize the Adjusting.](https://reader036.fdocuments.in/reader036/viewer/2022082620/5a4d1b107f8b9ab05998ed27/html5/thumbnails/3.jpg)
Which accounts will we need in the next financial period?
These accounts are not closed.
“Real” or Permanent
Assets
Liabilities
Capital (OE)
![Page 4: Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting & Closing Entries to the Ledger Journalize the Adjusting.](https://reader036.fdocuments.in/reader036/viewer/2022082620/5a4d1b107f8b9ab05998ed27/html5/thumbnails/4.jpg)
Which accounts will not apply to the next financial period?
Close these accounts
“Nominal” or Temporary
Revenue
Expenses
Drawings
Bring balance to zero!!
![Page 5: Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting & Closing Entries to the Ledger Journalize the Adjusting.](https://reader036.fdocuments.in/reader036/viewer/2022082620/5a4d1b107f8b9ab05998ed27/html5/thumbnails/5.jpg)
Why are Income Statement accounts not required for next fiscal period?
Matching Principle: states Revenue & Expenses must be recorded in same fiscal period to fairly calculate Net income/ loss.
![Page 6: Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting & Closing Entries to the Ledger Journalize the Adjusting.](https://reader036.fdocuments.in/reader036/viewer/2022082620/5a4d1b107f8b9ab05998ed27/html5/thumbnails/6.jpg)
Why do we Prepare the closing Entries?
1. To bring nominal (“RED”) accounts to zero
2. To update Capital
![Page 7: Closing Entries Chapter 9.3 & 9.4. We’re almost done, let’s finish it up! Post the Adjusting & Closing Entries to the Ledger Journalize the Adjusting.](https://reader036.fdocuments.in/reader036/viewer/2022082620/5a4d1b107f8b9ab05998ed27/html5/thumbnails/7.jpg)
Complete Accounting Cycle(1) Transactions occur, gather
source documents. Chp. 3 & 6
(2) Accounting entries recorded in the journal. Chp. 6
(3) Journal entries posted to the ledger accounts
(4) Ledger balanced by means of a trial balance
(DR= CR Chp.4)
(5) Work sheet prepared
(6) Income statement (chp 5) and balance sheet (chp.2,8)
prepared.
(7) Adjusting entries journalized and posted. Chp. 9.2, 9.5
-supplies-insurance-late bills-depreciation
(9)_____________________________
(8)____________________________________________________
Journalize & Post adjusting and closing Entries Chp. 9.3, 9.4
Post-closing Trial Balance Chp. 9.3