The document summarizes the steps in the accounting cycle and how to prepare a work sheet. It outlines 6 objectives to be covered, which include the 7 basic steps of the accounting cycle, how to prepare a work sheet and financial statements, adjusting and closing entries, fiscal year vs natural business year, and analyzing financial solvency. It then provides an example work sheet and walks through 6 adjustments to account balances to arrive at the adjusted trial balance.
Accounting - Lesson 3 : The Business Transactions Elearningpower
This Video online accounting course is
designed for those with little or no
experience in bookkeeping or accounting
and may be of interest to those looking to
review their basic knowledge of accounting.
Accounting - Lesson 3 : The Business Transactions Elearningpower
This Video online accounting course is
designed for those with little or no
experience in bookkeeping or accounting
and may be of interest to those looking to
review their basic knowledge of accounting.
Accounting - Lesson 2 : The Accounting Equation Elearningpower
This course covers the complete accounting cycle and is designed for those
who are interested in working in the areas of bookkeeping, clerical
accounting, finance or general office work or are looking to review their
accounting knowledge.Our accounting course teaches principles of
accounting, which are consistent across the globe. Even though there may
be minor differences in accounting principles in different countries, the core
accounting principles are the same.
Introduction to Financial statements - AccountingFaHaD .H. NooR
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
How to completing accounting cycle with worksheet.
This for you that interest to lean how to completing accounting system with manual. You gonna learn about basic off accounting a lot.
Accounting - Lesson 2 : The Accounting Equation Elearningpower
This course covers the complete accounting cycle and is designed for those
who are interested in working in the areas of bookkeeping, clerical
accounting, finance or general office work or are looking to review their
accounting knowledge.Our accounting course teaches principles of
accounting, which are consistent across the globe. Even though there may
be minor differences in accounting principles in different countries, the core
accounting principles are the same.
Introduction to Financial statements - AccountingFaHaD .H. NooR
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
How to completing accounting cycle with worksheet.
This for you that interest to lean how to completing accounting system with manual. You gonna learn about basic off accounting a lot.
Project I The trial balance of the Elker Fashions Inc.docxbriancrawford30935
Project I
The trial balance of the Elker Fashions Incorporated contained the following accounts at
December 31, 2008 the end of the company’s calendar year.
Elker Fashions Incorporated
Trial Balance
December 31, 2008
Debit Credit
Cash $ 26,500
Accounts Receivable 42,200
Merchandise Inventory (Beginning) 52,500
Land 94,000
Buildings 183,000
Accumulated Depreciation-Buildings $ 56,400
Equipment 84,500
Accumulated Depreciation-Equipment 42,400
Notes Payable 40,000
Accounts Payable 37,500
Common Stock 205,500
Retained Earnings 67,800
Dividends 11,000
Sales 865,800
Sales Discounts 6,100
Purchases 720,000
Purchase Discounts 16,400
Freight-in 12,900
Salaries Expense 70,700
Utilities Expense 11,400
Repair Expense 5,900
Gas and Oil Expense 7,600
Insurance Expense 3,500
$ 1,331,800 $ 1,331,800
Adjustment data:
1. Depreciation is $12,000 on buildings and $10,000 on equipment. (Both are administrative
expenses.)
2. Interest of $9,000 is unpaid on notes payable at December 31.
Other data:
1. The beginning balance of accounts receivable is $26,750.
2. The amount of total assets at the beginning of the year is $378,231.
3. Merchandise inventory on hand at December 31, 2008 is $80,000.
4. Salaries are 70% selling and 30% administrative.
5. $12,000 of the notes payable are payable next year.
6. Gas and oil expense is a selling expense.
7. Utilities expense, repair expense, and insurance expense are 100% administrative.
Instructions
1) Journalize the adjusting entries.
2) Prepare a multiple-step income statement and a retained earnings statement for the year
and a classified balance sheet as of December 31, 2008.
3) Journalize the closing entries.
4) Prepare a post-closing trial balance.
5) Prepare the following ratios and show all support for your computations:
(No partial credit given without work/computations)
a) Current Ratio
b) Quick Ratio
c) Working Capital
d) Accounts Receivable Turnover
e) Average Collection Period
f) Inventory Turnover
g) Days in Inventory
h) Debt to Total Assets Ratio
i) Gross Profit Ratio
j) Profit Margin Ratio
k) Return on Assets Ratio
l) Asset Turnover Ratio
6) Based on the ratios computed in 5) above, answer the following questions and use the
financial statement ratios to support your answers where appropriate:
Do you feel that the company is able to meet its current and long term obligations as they
become due?
Comment on the profitability of the company with respect to the various profitability ratios
that you computed.
Would you lend money to this company for the long term?
Comment on the ability.
Kelly consultingKelly ConsultingPost-closing Trial Balance 30-Apr-.docxDIPESH30
Kelly consultingKelly ConsultingPost-closing Trial Balance 30-Apr-08Account TitleDebitCreditCash22,100Accounts Receivables3400Supplies1350Prepaid Rent3200prepaid insurance1500Office Equipment14500Accumulated Depreciation330Accounts payable800salary payable120Kelly Capital44800$46,050$46,050.00Kelly ConsultingGeneral JournalMay, 20081-May2-May3-May4-May5-May6-May7-May8-May9-May10-May11-May12-MayAccounts ReceivableSupplies#2Post to "T" accounts below34001350Cash22,100Prepaid InsuranceOffice Equipment150014,500Prepaid Rent3200Accounts PayableSalaries Payable800120Accumulated Depreciation330CapitalFees earned44,800Unearned FeesSalary ExpenseElectric ExpenseAdvertising Expense
q2 adjsting entries Woods Journalize the following adjusting entries for Woods corporation as of December 31, 2014 (Assume that adjustments are made on a monthly basis)Woods Inc.Unadjusted Trial BalanceNovember 30, 2014Account DebitCreditCash18,570Accounts Receivable11,900Supplies1,820Prepaid rent750Equipment12,000Accumulated depreciation1100Accounts Payable1050Unearned Fees2800Capital Stock10000Retained earnings27800Dividends1,400Fees earned51450Wages Expense28210qRent expense2,250Utilities expense16040 Miscellaneous Expenses1260Total94,20094,200A) The equipment was purchased on January 1 of this year with an expected life of 10 years. There is no salvage value. Use the straight line methodB) The amount of supplies on hand as of December 31 is $1000.00C) Fees earned and unbilled $ 1,200D) Additional fees earned ( collected in prior periods) $ 800.00 E)Wages incurred and not paid $ 700F) Rent was prepaid on February 1 of this year for one yearAccount TitleDebitCreditABCDEF
Q 3 M & D M&D IncAdjusted Trial Balance12/31/14Income StatementBalance SheetAccount DebitCreditDebitCreditDebitCreditCash15200Accounts Receivable200Supplies1000Prepaid insurance550Equipment5000Accumulated depreciation40Notes Payable5000Accounts Payable2500Unearned Service revenue800Salaries & wages payable1200Interest payable50Owner's capital10000Owner's drawing500Service revenue10600Salaries & wages expense5200Supplies expenses1500Rent expense900Insurance expense50Interest expense50Depreciation expense40$30, 190$30, 190Complete the income statement and balance sheets columns of the worksheet.
Harvest Financial statementsUse the following information to complete the income statement and the balance sheetHarvest incorporatedHarvest incorporatedHarvest IncorporatedAdjusted Trial BalanceBalance SheetIncome Statement31-Dec-14 As of December 31, 2014For the year ended December 31, 2014AssetsRevenuesAccount DebitCredit$Cash$6,700Current AssetsExpensesAccounts Receivable600$$Supplies1,000Prepaid rent900Equipment15,000Accumulated depreciation850Notes Payable5,000Accounts Payable1,510Unearned rent revenue500 Total current assetsSalaries & wages payable400Total expenses$Interest payable50Property, plant and equipmentNet income (loss)$Owner's capital14,000$Owner's d ...
ACC 290 Final Exam
1. Which financial statement is used to determine cash generated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2. In terms of sequence, in what order must the four basic financial statements be prepared?
A. Balance sheet, income statement, statement of cash flows, and capital statement
B. Income statement, capital statement, statement of cash flows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows, and income statement
D. Income statement, capital statement, balance sheet, and statement of cash flows
3. In classifying transactions, which of the following is true in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits for assets
D. Normal balances are debits and increases can be debits or credits
4. An increase in an expense
ACC 290 Final Exam
1. Which financial statement is used to determine cash generated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2. In terms of sequence, in what order must the four basic financial statements be prepared?
A. Balance sheet, income statement, statement of cash flows, and capital statement
B. Income statement, capital statement, statement of cash flows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows, and income statement
D. Income statement, capital statement, balance sheet, and statement of cash flows
3. In classifying transactions, which of the following is true in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits for assets
D. Normal balances are debits and increases can be debits or credits
4. An increase in an expense
ACC 290 Final Exam
1. Which financial statement is used to determine cash generated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2. In terms of sequence, in what order must the four basic financial statements be prepared?
A. Balance sheet, income statement, statement of cash flows, and capital statement
B. Income statement, capital statement, statement of cash flows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows, and income statement
D. Income statement, capital statement, balance sheet, and statement of cash flows
3. In classifying transactions, which of the following is true in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits for assets
D. Normal balances are debits and increases can be debits or credits
4. An increase in an expense
ACC 290 Final Exam
1. Which financial statement is used to determine cash generated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2. In terms of sequence, in what order must the four basic financial statements be prepared?
A. Balance sheet, income statement, statement of cash flows, and capital statement
B. Income statement, capital statement, statement of cash flows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows, and income statement
D. Income statement, capital statement, balance sheet, and statement of cash flows
3. In classifying transactions, which of the following is true in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits for assets
D. Normal balances are debits and increases can be debits or credits
4. An increase in an expense
ACC 290 Final Exam
1. Which financial statement is used to determine cash generated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2. In terms of sequence, in what order must the four basic financial statements be prepared?
A. Balance sheet, income statement, statement of cash flows, and capital statement
B. Income statement, capital statement, statement of cash flows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows, and income statement
D. Income statement, capital statement, balance sheet, and statement of cash flows
3. In classifying transactions, which of the following is true in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits for assets
D. Normal balances are debits and increases can be debits or credits
4. An increase in an expense
ACC 290 Final Exam
1. Which financial statement is used to determine cash generated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2. In terms of sequence, in what order must the four basic financial statements be prepared?
A. Balance sheet, income statement, statement of cash flows, and capital statement
B. Income statement, capital statement, statement of cash flows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows, and income statement
D. Income statement, capital statement, balance sheet, and statement of cash flows
3. In classifying transactions, which of the following is true in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits for assets
D. Normal balances are debits and increases can be debits or credits
4. An increase in an expense
ACC 290 Final Exam
1. Which financial statement is used to determine cash generated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2. In terms of sequence, in what order must the four basic financial statements be prepared?
A. Balance sheet, income statement, statement of cash flows, and capital statement
B. Income statement, capital statement, statement of cash flows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows, and income statement
D. Income statement, capital statement, balance sheet, and statement of cash flows
3. In classifying transactions, which of the following is true in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits for assets
D. Normal balances are debits and increases can be debits or credits
4. An increase in an expense
Similar to Principal accounting - Ch04 completing the accounting cycle (20)
Presentasi ini dibuat untuk memenuhi salah satu tugas mata kuliah Budaya Nusantara. Berisikan tentang unsur-unsur dalam kebudayaan betawi. Dijelaskan secara singkat, tetapi cukup bermanfaat. Selamat membaca...
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
How to Create Map Views in the Odoo 17 ERPCeline George
The map views are useful for providing a geographical representation of data. They allow users to visualize and analyze the data in a more intuitive manner.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
How to Split Bills in the Odoo 17 POS ModuleCeline George
Bills have a main role in point of sale procedure. It will help to track sales, handling payments and giving receipts to customers. Bill splitting also has an important role in POS. For example, If some friends come together for dinner and if they want to divide the bill then it is possible by POS bill splitting. This slide will show how to split bills in odoo 17 POS.
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Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
2. Some of the action has been automated,
so click the mouse when you see this
lightning bolt in the lower right-hand
corner of the screen. You can point and
click anywhere on the screen.
3. 1. Review the seven basic steps of the accounting
cycle.
2. Prepare a work sheet.
3. Prepare financial statements from a work sheet.
4. Prepare adjusting and closing entries from a
work sheet.
5. Explain what is meant by the fiscal year and the
natural business year.
6. Analyze and interpret the financial solvency of a
business by computing working capital and the
current ratio.
Objectives
After studying this
chapter, you should
be able to:
4. Seven Basic Steps of the
Accounting Cycle
1. Transactions are analyzed and recorded in the journal.
2. Transactions are posted to the ledger.
3. A trial balance is prepared, adjustment data are
assembled, and an optional work sheet is completed.
4. Financial statements are prepared.
5. Adjusting entries are journalized and posted.
6. Closing entries are journalized and posted.
7. A post-closing trial balance is prepared.
5. Assets are commonly divided into classes
and that two of these classes are current
assets and property, plant, and equipment.
6. That’s correct. Cash and other
assets that are expected to be
converted into cash, sold, or
used up usually in less than a
year are current assets.
7. For example?
Well… besides cash, there’s
notes receivable, accounts
receivable, supplies, and other
prepaid items.
8. So, assets that have a life
over a year are listed under
property, plant, and
equipment.
There are some exceptions, but
that’s basically correct. Assets such
as office equipment, machinery,
buildings, and land would appear
under that heading.
9. Liabilities due usually within one
year or less and that are to be paid
out of current assets are called
current liabilities.
Accounts payable
Wages payable
Interest payable
Unearned fees
10. Liabilities not due for
more than a year usually
are long-term liabilities.
Mortgage note
payable
Mortgage payable
Bond payable
11. The work sheet is a useful device
for understanding the flow of
accounting data from the
unadjusted trial balance to the
financial statements.
12. The Work Sheet
Trial Balance
Accounts Dr Cr Dr Cr Dr Cr
Adjustments Adjusted TB
Prepared from the general ledger.
Accounts are listed in the following
order: assets, liabilities, owner’s
equity, revenues, and expenses.
13. Adjustments are entered here. Two
possibilities:
1. Deferrals – Existing balances are
changed.
2. Accruals – New information is
entered.
Trial Balance
Accounts Dr Cr Dr Cr Dr Cr
Adjustments Adjusted TB
The Work Sheet
14. The Work Sheet
Adjustments are combined with
the trial balance. Account
balances are now adjusted.
Trial Balance
Accounts Dr Cr Dr Cr Dr Cr
Adjustments Adjusted TB
15. Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accounts Payable 900
Unearned Rent 360
Chris Clark, Capital 25,000
Chris Clark, Drawing 4,000
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
Utilities Expense 985
Supplies Expense 800
Miscellaneous Expense 455
42,600 42,600
Account Title Debit Credit Debit Credit Debit Credit
Adjusted
Trial Balance Adjustments Trial Balance
NetSolutions
Work Sheet
For the Two Months Ended December 31, 2005
The Unadjusted
Trial Balance
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
16. (a) The Supplies account has a debit of
$2,000. A count of supplies at the end of
the period reveals that $760 is on hand.
Therefore, $1,240 in supplies was used
during the two-month period.
18. (b)The Prepaid Insurance account has a
debit balance of $2,400, which
represents prepayment of insurance for
24 months beginning December 1.
Thus, the insurance expense for this
month is $100 ($2,400 ÷ 24).
19. Cash 2,065
Accounts Receivable 2,220
Supplies 2,000 (a) 1,240
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accounts Payable 900
Unearned Rent 360
Chris Clark, Capital 25,000
Chris Clark, Drawing 4,000
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
Utilities Expense 985
Supplies Expense 800 (a) 1,240
Miscellaneous Expense 455
42,600 42,600
Account Title Debit Credit Debit Credit Debit Credit
Adjusted
Trial Balance Adjustments Trial Balance
NetSolutions
Work Sheet
For the Two Months Ended December 31, 2005
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Insurance Expense (b) 100
Accounts are added as needed.
(b) 100
20. (c) The Unearned Rent account has a credit
balance of $360, which represents the
receipt of three-months’ rent beginning
with December 1. Thus, the rent revenue
for December is $120.
FOR
RENT
30. Next, the unadjusted Trial
Balance columns and the
Adjustments columns are
combined to determine the
amounts displayed in the
Adjusted Trial Balance.
33. Revenue and expense balances in
the Adjusted Trial Balance column
are extended to the Income
Statement column.
Adjusted TB
Accounts Dr Cr Dr Cr Dr Cr
Income State. Balance Sheet
The Work Sheet
34. Asset, liability, owner’s equity, and
drawing balances in the Adjusted
Trial Balance column are extended
to the Balance Sheet column.
Adjusted TB
Accounts Dr Cr Dr Cr Dr Cr
Income State. Balance Sheet
The Work Sheet
35. To make room on the slides for
the Income statement and
Balance Sheet columns, the Trial
Balance and Adjustments
columns have been removed.
41. The difference between the
Income Statement column
totals is the net income (or net
loss) for the period.
42. The difference between the
Balance Sheet column totals is
also the income (or net loss)
for the period.
43. 9,755 16,960 33,645 26,440
7,205 7,205
16,960 16,960 33,645 33,645
Income Statement Balance Sheet
Net Income Net Income
44. NetSolutions
Income Statement
For Two Months Ended December 31, 2005
Fees earned $16,840
Rent revenue 120
Total revenues $16,960
Expenses:
Wages expense $ 4,525
Supplies expense 2,040
Rent expense 1,600
Utilities expense 985
Insurance expense 100
Depreciation expense 50
Miscellaneous expense 455
Total expenses 9,755
Net income $ 7,205
Every amount on this income statement was taken from the
Income Statement column of the work sheet.
45. NetSolutions
Statement of Owner’s Equity
For the Two Months Ended December 31, 2005
Chris Clark, Capital, November 1, 2005 $ 0
Investment on November 1, 2005 $25,000
Net income for November and December 7,205
$32,205
Less withdrawals 4,000
Increase in owner’s equity 28,205
Chris Clark, Capital, December 31, 2005 $28,205Either from the
income
statement or the
work sheet.
From the
Balance Sheet
debit column of
the work sheet.
46. NetSolutions
Balance Sheet
December 31, 2005
Assets Liabilities
Current assets: Current liabilities:
Cash $ 2,065 Accounts payable $900
Accounts receivable 2,720 Wages payable 250
Supplies 760 Unearned rent 240
Prepaid insurance 2,300 Total liabilities $ 1,390
Total current assets $ 7,845
Property, plant, and
equipment:
Land $20,000
Office equip. $1,800
Less accum.
depreciation 50 1,750 Owner’s Equity
Total property, plant Chris Clark, Capital 28,205
and equipment 21,750 Total liabilities and
Total assets $29,595 owner’s equity $29,595
From the
Statement
of Owner’s
Equity
47. Adjusting and Closing Entries
Adjusting entries are recorded
in the journal at the end of the
accounting period.
48. Adjusting and Closing Entries
If a work sheet has been
prepared, the data for
these entries are in the
Adjustments columns.
49. OWNER’S CAPITAL
The Closing Process
Income Summary
1
Revenues are
transferred to
Income Summary2
Expenses are
transferred to
Income Summary
3 Net Income or Net Loss is
transferred to Owner’s Capital
4
Drawings are transferred to
Owner’s Capital
50. OWNER’S CAPITAL
Income Summary
1
Revenues are
transferred to
Income Summary2
Expenses are
transferred to
Income Summary
3 Net Income or Net Loss is
transferred to Owner’s Capital
4
Drawings are transferred to
Owner’s Capital
The Income Summary
account does not appear on
the financial statements.
Adjusting and Closing Entries
51. Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Depreciation Expense
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Miscellaneous Expense
Bal. 455
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
Chris Clark, Capital
Bal. 25,000
Chris Clark, Drawing
Bal. 4,000
Income Summary
Note: The
balances shown
are adjusted
balances before
closing. The
following
sequence
demonstrates the
closing process.
The Closing Process
52. Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Depreciation Expense
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Miscellaneous Expense
Bal. 455
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
Chris Clark, Capital
Bal. 25,000
Chris Clark, Drawing
Bal. 4,000
Income Summary
Debit each revenue
account for the
amount of its
balance, and credit
Income Summary
for the total
revenue.
16,840
120
16,960
The Closing Process
53. Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Depreciation Expense
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Miscellaneous Expense
Bal. 455
Chris Clark, Capital
Bal. 25,000
Chris Clark, Drawing
Bal. 4,000
Income Summary
Debit Income
Summary for the
total expenses and
credit each expense
account for its
balance.
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,840
120
16,9609,775
455
100
2,040
985
50
1,600
4,525
The Closing Process
54. Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Depreciation Expense
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Miscellaneous Expense
Bal. 455
Chris Clark, Capital
Bal. 25,000
Chris Clark, Drawing
Bal. 4,000
Income Summary
Debit Income
Summary for the
amount of its
balance (in this
case, the net
income) and credit
the capital account.
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,840
120
16,9609,775
455
100
2,040
985
50
1,600
4,525
7,205
7,205
The Closing Process
55. Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Depreciation Expense
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Miscellaneous Expense
Bal. 455
Chris Clark, Capital
Bal. 25,000
Chris Clark, Drawing
Bal. 4,000
Income Summary
Debit the capital
account for the
balance of the
drawing account,
and credit drawing
for the same
amount.
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,840
120
16,9609,775
455
100
2,040
985
50
1,600
4,525
7,205
7,205
4,000
4,000
The Closing Process
56. Wages Expense
Bal. 4,525
Rent Expense
Bal. 1,600
Depreciation Expense
Bal. 50
Utilities Expense
Bal. 985
Supplies Expense
Bal. 2,040
Insurance Expense
Bal. 100
Miscellaneous Expense
Bal. 455
Chris Clark, Capital
Bal. 25,000
Chris Clark, Drawing
Bal. 4,000
Income Summary
Fees Earned
Bal. 16,840
Rent Revenue
Bal. 120
16,480
120
16,9609,775
445
100
2,040
985
50
1,600
4,525
7,205
7,205
4,000
4,000
Close Revenues
Close Expenses
Close Income Summary
Close Drawing
16,840
120
16,960
4,525
1,600
50
985
2,040
100
455
9,775
7,205
7,205
4,000
4,000
Review of the Closing Process
57. After the closing entries
are posted, all of the
temporary accounts have
zero balances.