Accounting Cycle: The first step of accounting cycle is recording of the monetary transactions. The transactions are recorded in the journal when they occur in a chronological order and then transactions get posted in ledger and then the trial balance is prepared and other financial statements get prepared thereafter in series for reporting the financial performance of the organization. Closing Entries: Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the period, to transfer the final balance. Rules for closing entries: Debit the account: All temporary accounts with credit balances. Credit the account: All temporary accounts with debit balances To prepare: Closing entries.

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Chapter 4, Problem 4.2DIE

To determine

Accounting Cycle: The first step of accounting cycle is recording of the monetary transactions. The transactions are recorded in the journal when they occur in a chronological order and then transactions get posted in ledger and then the trial balance is prepared and other financial statements get prepared thereafter in series for reporting the financial performance of the organization.

Closing Entries: Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the period, to transfer the final balance.

Rules for closing entries:

Debit the account: All temporary accounts with credit balances.

Credit the account: All temporary accounts with debit balances

To prepare: Closing entries.

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