Explanation Closing entries: Closing entries are those journal entries , which are passed to transfer the final balances of temporary accounts, (all revenues account, all expenses account and dividend) to the retained earnings . Closing entries produce a zero balance in each temporary account. Three closing entries which are required at the end of the accounting periodis as follows: Closing entry for revenue account: In this closing entry, the revenue account is closed by transferring the amount of revenue to the retained earnings in order to bring the revenue accounts balance to zero. Date Account Title and Explanation Post Ref. Debit ($) Credit ($) XXX Service revenue XXX Retained earnings XXX (To close all revenue account) Closing entry for expenses account: In this closing entry, expenses accounts are closed by transferring the amount of all expenses account to the retained earnings in order to bring all the expense accounts balance to zero. Date Account Title and Explanation Post Ref...

Financial Accounting (Connect NOT Included)

4th Edition

ISBN: 9781259930492

Author: SPICELAND

Publisher: MCG

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Describe the debits and credits of closing entries which are required at the end of the accounting period.

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Financial Accounting (Connect NOT Included)

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