ACC 205 Week 3 DQ2 What are the four closing journal entries Why are they necessary 1 PDF

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ACC 290 Week 3 DQ2 What are the four shutting journal entries Why are they necessary? What are reversing entries? Why are they used? What are the pros and cons of using reversing entries? Why are reversing entries optional? The four closing entries are revenue is closed to the income summary, expenses are closed to the income summary, the income summary is closed to retained earnings, and dividens are closed to retained earnings. The purpose of closing entries is to close the temporary accounts to begin the next accounting cycle with zero balances. Reversing entries are the opposite of the closing entries done in the previous accounting cycle. Reverse entries are performed during the first day of the new accounting cycle reversing the closing entries of the previous cycle. A pro for using the reverse entry is that you can bring the outstanding balance to the new accounting cycle quite easily. A con of this optional method is that it is an extra step that can cause data to get interpreted inaccurately. Reversing articles are optionally available because changing entries will produce the same results later inside the accounting circuit during the same period....