Chapter 10 Closing entries & the PCTB PDF

Preview

Summary

Chapter 10 Closing entries & the PCTB...

Description

Chapter 10 Closing entries & the PCTB  Closing Entries: The process of reducing all temporary accounts to zero in preparation for the new accounting period.  A Net Loss: If Income Summary has a debit balance prior to closing it, the company is said to have had...  A Net Income: If Income Summary has a credit balance prior to closing it, the company is said to have had...  Assets, Liabilities, and Capital are Permanent accounts  Revenue, Expenses, and Withdrawals are Temporary accounts.  Debit-Revenue account; Credit-Income Summary To close a Revenue account, you would  Debit-Income Summary; Credit-Expense account To close an Expense account, you would  Fourth Closing Entry Closes the Withdrawal accounting into the Capital account.  Transfers the net income/loss to the Capital account The third closing entry  Postclosing Trial Balance The last step of the accounting cycle.

 Permanent Accounts Only these types of accounts should be on the Postclosing Trial Balance.  Temporary AccountsThese types of accounts are closed at the end of the accounting period....