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As described earlier in this chapter, four dosing entries are required at the end of an accounting period. These four closing entries are as follows:
As described earlier in this chapter, four dosing entries are required at the end of an accounting period. These four closing entries are as follows: Debit each revenue account for its balance, and credit Income Summary for the total revenue. Credit each expense account for its balance, and debit Income Summary for the total expenses. Debit Income Summary for its balance, and credit the owner's capital account. Delhi the owner s capital account for the balance of the drawing account, and credit the drawing account. The four closing entries for Kelly Consulting are shown in Exhibit 16. The closing and entries are posted to Kelly Consulting's ledger as shown in Exhibit 18. After the closing entries are posted, Kelly consulting's ledger has the following characteristics. The balance of Kelly Pitney, Capital of $42,000 agrees with the normal reported on the statement of owner's account will have zero balances. The closing entries are normally identified in the ledger as "closing". In addition, a line is often inserted in both balance columns after a closing entry is posted. This separates next period's revenue, expense, and withdrawal transactions from those of the current period. A post-closing trial balance is prepared after the closing entries have been posted. The purpose of the next period. The accounts and amounts in the post-closing trial balance should agree exactly with the accounts and amounts listed on the balance sheet at the end of the period. As described earlier in this chapter, four dosing entries are required at the end of an accounting period. These four closing entries are as follows: Debit each revenue account for its balance, and credit Income Summary for the total revenue. Credit each expense account for its balance, and debit Income Summary for the total expenses. Debit Income Summary for its balance, and credit the owner's capital account. Delhi the owner s capital account for the balance of the drawing account, and credit the drawing account. The four closing entries for Kelly Consulting are shown in Exhibit 16. The closing and entries are posted to Kelly Consulting's ledger as shown in Exhibit 18. After the closing entries are posted, Kelly consulting's ledger has the following characteristics. The balance of Kelly Pitney, Capital of $42,000 agrees with the normal reported on the statement of owner's account will have zero balances. The closing entries are normally identified in the ledger as "closing". In addition, a line is often inserted in both balance columns after a closing entry is posted. This separates next period's revenue, expense, and withdrawal transactions from those of the current period. A post-closing trial balance is prepared after the closing entries have been posted. The purpose of the next period. The accounts and amounts in the post-closing trial balance should agree exactly with the accounts and amounts listed on the balance sheet at the end of the period
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