Accounting: Closing Entries
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Note: To gain access to this WBLT, send email to [email protected]
Note: To gain access to this WBLT, send email to [email protected]
Description
Microsoft teams can be used in a multitude of scenarios. Workplace, school settings, project management, group projects, individual assignments – the possibilities are endless. It is linked to the online Microsoft Office suite of products and allows for the integration of third-party apps with options to work both on and off-line. Teams also can be accessed through the use of a mobile app so that there is access to work anywhere and the design of the platform is to provide a central hub for productivity. This is a collaborative tool that allows a multitude of users in various locations to work and share in one common space, working on files in real-time.
The module being presented is How to Prepare Closing Entries in the Accounting Cycle. At the end of the accounting period, the company need to have the accounts ready for the next period. This is called closing the books. In closing the books, the company distinguishes between temporary (Revenue, Expenses and Owner's Drawings), and permanent accounts (Assets, Liabilities and Owner's Equity).
Closing entries also produce a zero balance in each temporary account. The temporary accounts are then ready to accumulate data in the next accounting period separate from the data of prior periods.
Closing entries are necessary as certain account types cannot carry over into the next Accounting Cycle, otherwise amounts being reported become inflated and causes for an inaccurate picture of the performance of the business. There are two methods that you can use for this process: The Direct Method and the Income Summary Method. Both are explored in this module.
The module being presented is How to Prepare Closing Entries in the Accounting Cycle. At the end of the accounting period, the company need to have the accounts ready for the next period. This is called closing the books. In closing the books, the company distinguishes between temporary (Revenue, Expenses and Owner's Drawings), and permanent accounts (Assets, Liabilities and Owner's Equity).
Closing entries also produce a zero balance in each temporary account. The temporary accounts are then ready to accumulate data in the next accounting period separate from the data of prior periods.
Closing entries are necessary as certain account types cannot carry over into the next Accounting Cycle, otherwise amounts being reported become inflated and causes for an inaccurate picture of the performance of the business. There are two methods that you can use for this process: The Direct Method and the Income Summary Method. Both are explored in this module.
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Intended Audience
This module is designed to provide a rudimentary knowledge to complete the final steps in an Accounting Cycle. It will be assumed that the user has a Beginners understanding of Accounting Principles.
Learning Outcomes
After completing this WBLT, the user should be able to:
- Prepare financial statements using the adjusted trial balance
- Prepare closing journal entries and post them to the general ledger
- Prepare the post-closing trial balance to complete the accounting cycle
- Prepare a 10-column worksheet
Contributor
Submitted by: Roxanne Stewart
Email: [email protected]
Bio: Completing M. Ed program at Ontario Tech University. Partial Load Professor with Durham College specializing in SAP, Microsoft Office and Basic Accounting Principles.
Email: [email protected]
Bio: Completing M. Ed program at Ontario Tech University. Partial Load Professor with Durham College specializing in SAP, Microsoft Office and Basic Accounting Principles.