What are the steps for closing entries, Accounting Basics

Assignment Help:

What are the steps for Closing entries

There is a certain order that should be used to close accounts: REID

1.  Balance of the total Revenue to Income Summary

2.  Balance of the total Expenses to Income Summary

3.  Balance of the Income Summary account to the Capital account. This would be the Net Income or Net Loss amount.

4.  Balance of the owner's Drawing account is closed directly to Capital account. This isn't used in the determination of net loss or gain.

You can check the accuracy of closing entries by comparing the balance of Owner's Equity capital account, after posting, with ending balance of capital as reported on Statement of Owner's Equity-amounts MUST be the same.

 


Related Discussions:- What are the steps for closing entries

Show journalizing adjusting entries, Q. Show Journalizing adjusting entries...

Q. Show Journalizing adjusting entries? Subsequent to completing Micro Train's financial statements from the work sheet you should enter the adjusting entries in the general jo

Wormhole, Sucked into a wormhole while spending time in outer space, you la...

Sucked into a wormhole while spending time in outer space, you land in a perfect world where accountants are worshipped and paid extravagantly. As an accountant, you're immediately

Explain about purchase discounts, Q. Explain about Purchase discounts? ...

Q. Explain about Purchase discounts? Purchase discounts frequently companies purchase merchandise under credit terms that permit them to deduct a stated cash discount if they p

Explain the business assets withdrawal, Explain the business assets Withdra...

Explain the business assets Withdrawal Withdrawal (Drawing) is removal of business assets for personal use by owner. This transaction decreases the asset taken and value of

Assets, wat is assets and its types?

wat is assets and its types?

Explain about gross margin method, Q. Explain about Gross margin method? ...

Q. Explain about Gross margin method? The steps in computing ending inventory under the gross margin method are - Estimate gross margin based on net sales using the similar

Illustrating the recording of sales returns, Q. Illustrating the recording ...

Q. Illustrating the recording of sales returns? Following are two instances illustrating the recording of sales returns in the Sales Returns and Allowances account - Suppose

Detailed steps for completing the work sheet, Q. Detailed steps for complet...

Q. Detailed steps for completing the work sheet ? Accountants use these preliminary steps in preparing the work sheet. The following segments describe the detailed steps for com

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd