Completing the Accounting Cycle

Answer

Companies generally prepare closing entries directly from the adjusted balances in the ledger. They could prepare separate closing entries for each nominal account. The four basic steps in the closing process are:
  • Debit each revenue account for its balance, and credit Income Summary for total revenues.
  • Debit Income Summary for total expenses, and credit each expense account for its balance.
  • Debit Income Summary and credit Owner's Capital for the amount of net income.
  • Debit Owner's Capital for the balance in the Owner's Drawings account, and credit owner's Drawings for the same amount

Problems: Completing the Accounting Cycle

Problem-1: Completing the Accounting Cycle

The trial balance columns of the worksheet for Wareen Roofing at March 31, 2019, are as follows. Wareen Roofing Worksheet For the Month Ended March 31, 2019 Other data A...

Problem-2: Completing the Accounting Cycle

The adjusted trial balance columns of the worksheet for Thao Company, owned by D. Thao, are as follows. Thao Company Worksheet For the Year Ended December 31, 2019 Instructions Complete...

Problem-3: Completing the Accounting Cycle

The completed financial statement columns of the worksheet for Bray Company are shown as follows. Bray Company Worksheet For the Year Ended December 31, 2019 Instructions Prepare an income statement,...

Problem-4: Completing the Accounting Cycle

Vang Management Services began business on January 1, 2019, with a capital investment of $120,000. the company manages condominiums for owners (Service Revenue) and rents space in its own office...

Problem-5: Completing the Accounting Cycle

Anya Clark opened Anya's Cleaning Service on July 1, 2019. During July, the following transactions were completed. July 1Anya invested $20,000 cash in the business. 1Purchased used truck for $12,000,...

Problem-6: Completing the Accounting Cycle

Casey Hartwig, CPA, was retained by Global Cable to prepare financial statements for April 2019. Hartwig accumulated all the ledger balances per Global's records and found the following. Global Cable...

Problem-7: Completing the Accounting Cycle

The trial balance columns of the worksheet for Dixon Company at June 30, 2019, are as follows Global Cable Trial BalanceApril 30, 2019 Casey Hartwig reviewed the records and found...

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