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5) If all transactions and AJE have been recorded, then it is time to calculate the ending balance of all T accounts and build the
5) If all transactions and AJE have been recorded, then it is time to calculate the ending balance of all T accounts and build the Trial balance to check if the sum of all debits is equal to the sum of all credits. 6) If the trial balance balanees, then it is time to start preparing the financial statements. We start determining the net income or net loss of the period. The income is determined as the difference between revenue and expenses for the period and it is journalized and then posted resulting in all Revenue and Expenses accounts to have ending balances of zero. The temporary account Income Summary is used to hold the income(loss) until it is moved to Retained Earnings. The Income statement reflects the journal entry
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