
Concept explainers
(a)
Income statement
This is a financial statement that shows the net income earned, or net loss suffered by a company, through reporting all the revenues earned, and expenses incurred, by the company over a specific period of time. An income statement is also known as an operations statement, an earnings statement, a revenue statement, or a
Sales section
Sales section of the income statement computes the net sales of the Company during the accounting period.
Closing entries
Closing entries are those
Rules for closing entries:
- Debit the account: All temporary accounts with credit balances.
- Credit the account: All temporary accounts with debit balances
To prepare: Sales section of the income statement of S Company.
(b)
(1)
To prepare: Closing entries for sale revenue
2.
To prepare: Closing entries for the contra accounts to sales revenue.

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Chapter 5 Solutions
Accounting Principles - Standalone book
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