Closing Entries and the Postclosing Trial Balance FLASHCARDS

Closing entries Journal entries that transfer the results of operations (net income or net loss) to owner’s equity and reduce the revenue, expense, and drawing account balances to zero Closing entries

Interpret To understand and explain the meaning and importance of something (such as financial statements) Interpret

Income Summary account A special owner’s equity account that is used only in the closing process to summarize the results of operations Income Summary account

Postclosing trial balance A statement that is prepared to prove the equality of total debits and credits after the closing process is completed Postclosing trial balance

After-closing trial balance Another term for postclosing trial balance After-closing trial balance

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