At the end of an accounting year, the revenue, expenses, and owners’ drawing account are closed by a company by transferring their balance to the owners’ capital accounts. This process of closing the accounts is made by preparing the closing entries. To prepare: The closing entries to close the revenue and expense accounts. Also, post these entries to the revenue and expense account.

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Chapter 4, Problem 6BE

To determine

Introduction: At the end of an accounting year, the revenue, expenses, and owners’ drawing account are closed by a company by transferring their balance to the owners’ capital accounts. This process of closing the accounts is made by preparing the closing entries.

To prepare: The closing entries to close the revenue and expense accounts. Also, post these entries to the revenue and expense account.

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