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The After Close Balance for both revenue and expense accounts should always be a zero balance. During the closing process for expense accounts, the Retained
The After Close Balance for both revenue and expense accounts should always be a zero balance.
During the closing process for expense accounts, the Retained Earnings account is debited, which decreases Retained Earnings.
During the closing process for revenue accounts, the Retained Earnings account is credited, which increases Retained Earnings.
If the sum of the Ending Balances in the revenue accounts is greater than the sum of the Ending Balances in the expense accounts, then Retained Earnings will increase as a result of the closing entries.
The temporary accounts should always have a zero balance on the PostClosing Trial Balance.
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