Describe the essential steps in the closing process, Accounting Basics

Assignment Help:

Q. Describe the essential steps in the closing process?

In accounting we habitually refer to the process of closing as closing the books. Remember that merely expense, revenue and Dividend accounts are closed not liability, asset, Capital Stock or Retained Earnings accounts. The four essential steps in the closing process are

- Closing the revenue accounts that are transferring the balances in the revenue accounts to a clearing account called Income Summary.

- Closing the expense accounts that are transferring the balances in the expense accounts to a clearing account called Income Summary.

- Closing the Income Summary account that are transferring the balance of the Income Summary account to the Retained Earnings account.

- Closing the Dividends account that are transferring the balance of the Dividends account to the Retained Earnings account.


Related Discussions:- Describe the essential steps in the closing process

Inventory or incidental cost, While perusing medical practice, is the cost ...

While perusing medical practice, is the cost of supplies, for patients on site, considered as an inventory, or an incidental cost? With 2 million in sales the chemotherapy medicine

Ratio analysis, want to know sbp bsc rato analysis for 2010 t0 2014

want to know sbp bsc rato analysis for 2010 t0 2014

Concepts and Conventions Underlying the Preparation of Finan, nWhat is the ...

nWhat is the implication of applying accounting concepts wrongly.imum 100 words accepted#

Using the break-even equations to solve for price, using the break-even equ...

using the break-even equations to solve for price and variable cost per unit andromeda company's break-even point is 2,400 units. variable cost per unit is $42; total costs are 6

What is marginal cost and marginal revenue, Q. What is Marginal cost and ma...

Q. What is Marginal cost and marginal revenue? Marginal cost is the extra cost incurred by addingone more item. Marginal revenue is revenue from selling one more item. Economic

Hotel, data dictionary

data dictionary

General Journal, Received and paid the telephone bill for $231 including GS...

Received and paid the telephone bill for $231 including GST

H.W, BUS ADM-201 Fall 2012 EXTRA CREDIT 2 - Due in DS week of November 26 ...

BUS ADM-201 Fall 2012 EXTRA CREDIT 2 - Due in DS week of November 26 GRADING: Worth 15 points. Partially credit will only be given if you attempt all requirements a through g lis

Review, 1. State the equity equation. 2. Which account represents the begi...

1. State the equity equation. 2. Which account represents the beginning equity figure? 3. In which accounts are changes to equity recorded? 4. How do drawings affect the calculati

At the end of the current year, At the end of the current year, $19,900 of ...

At the end of the current year, $19,900 of fees have been earned but not billed to clients. • a. What is the adjustment to record the accrued fees? Indicate each account affecte

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