财务会计-Financial Accounting 4-Adelphi University-Sam Yang.ppt

Chapter 4 Completing the Accounting Cycle Benefits of a Work Sheet Prepare the Financial Statements Closing Process Temporary and Permanent Accounts Recording Closing Entries Close Revenue accounts to Income Summary. Close Expense accounts to Income Summary. Close Income Summary account to Owner’s Capital. Close Withdrawals to Owner’s Capital. Closing Process Closing Process Closing Process Closing Process Closing Process Close Revenue Accounts to Income Summary Close Revenue Accounts to Income Summary Close Expense Accounts to Income Summary Close Expense Accounts to Income Summary Close Income Summary to Owner’s Capital Close Withdrawals to Owner’s Capital Close Withdrawals to Owner’s Capital Post-Closing Trial Balance List of permanent accounts and their balances after posting closing entries. Total debits and credits must be equal. Post-Closing Trial Balance Classified Balance Sheet Current Ratio End of Chapter 4 Let’s use the adjusted trial balance for FastForward and prepare the necessary closing entries. We will follow our four-step approach. Our first step is to close the two revenue accounts. Since they have a credit balance, we will debit the accounts to zero out the balance. Let’s look at the closing entry in the journal. To close the accounts, we debit consulting revenue for seventy-eight hundred fifty dollars and debit rental revenue for three hundred dollars. The credit to income summary is for the total of eighty-one hundred fifty dollars. Let’s see what the ledger will look like after the closing entry is posted. The balance in both revenue accounts is now zero and all revenue has been transferred to the credit side of the income summary. Our second step is to close all expense accounts to the income summary. Let’s make the journal entry. We credit each expense account for its adjusted balance and debit the income summary for the total of forty-three hundred sixty-five dollars. Let’s look at the ledger accounts after posting this ent