1. Closing the Accounting Cycle
LESSON 8-1
4/21/2017
Closing the Accounting Cycle
GREEN

2. Closing the Accounting Cycle
LESSON 8-1
4/21/2017
Closing the Accounting Cycle
Please note that all slides are available on the class website.
GREEN

3. THE ACCOUNTING CYCLE 1 2 8 3 7 4 6 5 1. Analyzes transactions
page 217
1. Analyzes transactions 1
2. Journalize 2
3. Post 8
4. Prepare work sheet
5. Prepare financial statements 3
6. Journalize adjusting and closing entries 7 4
7. Post adjusting and closing entries
8. Prepare post-closing trial balance 6 5
LESSON 8-3

4. LESSON 8-2 Recording Adjusting Entries
4/21/2017
Recording Adjusting Entries
GREEN

5. ADJUSTING ENTRY PROCEDURES
page 202
1. Write the heading.
2. Write the date.
3. Write the title of the account debited. Record the debit amount.
4. Write the title of the account credited. Record the credit amount.
LESSON 8-1

6. LESSON 8-2 Recording Closing Entries
4/21/2017
Recording Closing Entries
GREEN

7. TERMS all on page 206 of your text book
permanent accounts
temporary accounts
closing entries
LESSON 8-2

8. TERMS all on page 206 of your text book
Permanent Accounts – Accounts used to accumulate information form one fiscal period to the next. Examples of permanent accounts include asset and liability accounts (balance sheet accounts), as well as the owner’s capital account.
Temporary Accounts – Accounts used to accumulate information until it is transferred to the owner’s capital account. Examples of temporary accounts are revenue and expense accounts (income statement accounts), the owner’s drawing account, and the income summary account.
LESSON 8-2

9. TERMS all on page 206 of your text book
Closing Entries – Journal entries used to prepare temporary accounts for a new fiscal period. The temporary account balances must be reduced to ZERO at the end of each fiscal period.
LESSON 8-2

10. NEED FOR THE INCOME SUMMARY ACCOUNT
page 207
LESSON 8-2

11. CLOSING ENTRY FOR AN INCOME STATEMENT ACCOUNT WITH A CREDIT BALANCE
page 208
(Debit to close)
1. Write the heading.
2. Write the date.
3. Write the title of the account debited. Record the debit amount.
4. Write the title of the account credited. Record the credit amount.
LESSON 8-2

12. CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES
page 209
(Credit to close)
1. Date
2. Income Summary
3. Credit
4. Debit amount
LESSON 8-2

13. CLOSING ENTRY TO RECORD NET INCOME OR LOSS AND CLOSE THE INCOME SUMMARY ACCOUNT
page 210
1. Date
2. Debit
(Income Summary: debit to close)
(Capital: credit to record net income)
3. Credit
LESSON 8-2

14. CLOSING ENTRY FOR THE OWNER’S DRAWING ACCOUNT
LESSON 8-2
4/21/2017
CLOSING ENTRY FOR THE OWNER’S DRAWING ACCOUNT
page 211
1. Date
(Credit to close)
2. Debit
3. Credit
LESSON 8-2
GREEN

15. LESSON 8-3 Preparing a Post-Closing Trial Balance
4/21/2017
Preparing a Post-Closing Trial Balance
GREEN

16. GENERAL LEDGER ACCOUNTS AFTER ADJUSTING AND CLOSING ENTRIES ARE POSTED
LESSON 8-3
4/21/2017
GENERAL LEDGER ACCOUNTS AFTER ADJUSTING AND CLOSING ENTRIES ARE POSTED
page 213
LESSON 8-3
GREEN

17. POST-CLOSING TRIAL BALANCE
page 216
1. Heading
2. Account titles
3. Account balances
4. Single rule
5. Compare totals
6. Totals
7. Record totals
8. Double rule
LESSON 8-3