2. Most of the Closing Process is the same…
• We are still following the R-E-I-D procedure … except that now there
are some different accounts to be dealt with
• Key to remember ..
• First closing entry (Closing Revenue to Income Summary) will also include
ENDING INVENTORY (they are both in the Income Statement CR column of
the Work Sheet
• Second closing entry (Closing Expenses to Income Summary) will also include
BEGINNING INVENTORY (they are both in the Income Statement DR column of
the Work Sheet
3. Chapter 10 – Accounting for a
Merchandising Business | Accounting 1, 7th
Edition
3
Closing Entries for Inventory
4. Example …
This completed work sheet’s closing entries are on the next slide….
Notice the Merchandise Inventory account now included
5. Example …
Notice the new
accounts
Merchandise Inventory,
Purchases,
Freight In…
The key is to keep your
columns
Together ….
