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A corporation’s net income or net loss is closed to Retained Earnings
A corporation’s net income or net loss is closed to Retained Earnings. After posting the closing entries, accountants prepare a post-closing trial balance. Home Glencoe Accounting Glencoe Accounting Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.
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Journalize closing entries for a merchandising corporation.
Post closing entries to the general ledger accounts. Prepare a post-closing trial balance. Describe the steps in the accounting cycle. Home Glencoe Accounting Glencoe Accounting Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.
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Steps for Closing the Ledger
Journalizing Closing Entries Section 20.1 1 Close accounts with balances in the Income Statement Credit column to Income Summary. Steps for Closing the Ledger for a Corporation 2 Close accounts with balances in the Income Statement Debit column to Income Summary. 3 Close Income Summary to Retained Earnings. Home Glencoe Accounting
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Steps for Closing the Ledger
Journalizing Closing Entries Section 20.1 Closing Entries Needed for a Corporation See page 592 Home Glencoe Accounting
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Steps for Closing the Ledger
Journalizing Closing Entries Section 20.1 Closing Entries Needed for a Corporation (continued) Home See page 593 Glencoe Accounting
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Closing Entry to Transfer a Net Loss
Journalizing Closing Entries Section 20.1 If there is a net loss, credit Income Summary for the amount and debit Retained Earnings for the amount. See page 594 Home Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries When closing the general ledger, write Closing Entry for each posting in the Description column of the general ledger account. Home Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries Partial General Ledger at the End of the Fiscal Period Home See pages 596 – 600 Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries Partial General Ledger at the End of the Fiscal Period (continued) Home See pages 596 – 600 Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries Partial General Ledger at the End of the Fiscal Period (continued) Home See pages 596 – 600 Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries Partial General Ledger at the End of the Fiscal Period (continued) Home See pages 596 – 600 Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries Partial General Ledger at the End of the Fiscal Period (continued) Home See pages 596 – 600 Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries Partial General Ledger at the End of the Fiscal Period (continued) Home See pages 596 – 600 Glencoe Accounting
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Closing the General Ledger
Section 20.2 Posting Closing Entries Partial General Ledger at the End of the Fiscal Period (continued) Home See pages 596 – 600 Glencoe Accounting
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Preparing a Post-Closing Trial Balance
Section 20.2 Posting Closing Entries A post-closing trial balance is prepared at the end of the accounting period to prove the general ledger accounts are in balance. See page 600 Home Glencoe Accounting
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Completing the Accounting Cycle for a Merchandising Business
Section 20.2 Posting Closing Entries See page 601 Home Glencoe Accounting
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To journalize the closing entries, put the following in order:
Question 1 To journalize the closing entries, put the following in order: Close temporary accounts with debit balances. ________ Close temporary accounts with credit balances. ________ Close the Income Summary account to Capital. ________ 2 1 3 Home Glencoe Accounting
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Other trial balances include both temporary and permanent accounts.
Question 2 How is a post-closing trial balance different from other trial balances? The post-closing trial balance is prepared after closing entries in which temporary account balances have been transferred to the capital account. The post-closing trial balance has only permanent or balance sheet accounts. Other trial balances include both temporary and permanent accounts. Home Glencoe Accounting
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