Chapter Five
Closing Entries and
the Post-Closing Trial
Balance
Performance Objectives
1. List the steps in the accounting cycle
2. Journalize and post closing entries for
a service enterprise
3. Prepare a post-closing trial balance
4. Define the following methods of
accounting: accrual basis and
modified cash basis
5. Prepare interim statements
Accounting is Fun!
5-2
List The Steps In The Accounting Cycle
1.
2.
3.
4.
5.
6.
7.
8.
9.
Analyze source documents & record
business transactions in a journal
Post journal entries to the ledger
accounts
Prepare a trial balance
Gather adjustment data and record
adjustments in the work sheet
Complete the work sheet
Create financial reports from data in work
sheet
Journalize and post the adjusting entries
Journalize and post the closing entries
Prepare the post-closing trial balance
Accounting is Fun!
5-3
Closing Entries
• Entries made at the end of a fiscal
period to close off the revenue,
expense, and drawing accounts—that
is, to make the balances of the
temporary-equity accounts equal to zero
• Also called clearing the accounts
Accounting is Fun!
5-4
Purpose of Closing Entries
Accounting is Fun!
5-5
Purpose of Closing Entries
• To close out balances that relate to one
fiscal period and start fresh in the next
period
• To zero out the following ledger
accounts:
– Revenue
– Expenses
• To update the owner’s Capital account
Accounting is Fun!
5-6
Balances on the Financial Statements
Cruz Auto Detail
Income Statement
For Month Ended June 30, 2005
Revenue:
Income from Services
Expenses:
Wages Expense
Rent Expense
Advertising Expense
Utilities Expense
Supplies Expense
Insurance Expense
Depreciation Expense, Equipment
Total Expense
Net Income
Cruz Auto Detail
Balance Sheet
June 30, 2005
Assets
$7,270.00
$1,690.00
900.00
400.00
160.00
540.00
30.00
520.00
4,240.00
$3,030.00
Cruz Auto Detail
Statement of Owner's Equity
For Month Ended June 30, 2005
L.A. Cruz, Capital, June 1, 2005
$70,000.00
Net Income for June
$3,030.00
Less Withdrawals for June
3,000.00
Increase in Capital
30.00
L.A. Cruz, Capital, June 30, 2005
$70,030.00
Accounting is Fun!
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Less Accumulated Depreciation
Total Assets
Liabilities
Accounts Payable
Wages Payable
Total Liabilities
Owner's Equity
L.A. Cruz, Capital
Total Liabilities and Owner's Equity
$23,250.00
200.00
330.00
$51,500.00
520.00
50,980.00
$74,760.00
$4,440.00
290.00
$4,730.00
70,030.00
$74,760.00
5-7
Revenue - Expenses = Net Income
Net Income
Statement of Owner’s Equity
Cruz Auto Detail
Income Statement
For Month Ended June 30, 2005
Revenue:
Income from Services
Expenses:
Wages Expense
Rent Expense
Advertising Expense
Utilities Expense
Supplies Expense
Insurance Expense
Depreciation Expense, Equipment
Total Expense
Net Income
Cruz Auto Detail
Balance Sheet
June 30, 2005
$7,270.00
$1,690.00
900.00
400.00
160.00
540.00
30.00
520.00
4,240.00
$3,030.00
Liabilities
Accounts Payable
Wages Payable
Total Liabilities
Owner's Equity
L.A. Cruz, Capital
Total Liabilities and Owner's Equity
Cruz Auto Detail
Statement of Owner's Equity
For Month Ended June 30, 2005
L.A. Cruz, Capital, June 1, 2005
Net Income for June
Less Withdrawals for June
Increase in Capital
L.A. Cruz, Capital, June 30, 2005
Assets
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Less Accumulated Depreciation
Total Assets
$23,250.00
200.00
330.00
$51,500.00
520.00
50,980.00
$74,760.00
$4,440.00
290.00
$4,730.00
70,030.00
$74,760.00
$70,000.00
$3,030.00
3,000.00
Accounting is Fun!
30.00
$70,030.00
5-8
Withdrawals
Statement of Owner’s Equity
Cruz Auto Detail
Income Statement
For Month Ended June 30, 2005
Revenue:
Income from Services
Expenses:
Wages Expense
Rent Expense
Advertising Expense
Utilities Expense
Supplies Expense
Insurance Expense
Depreciation Expense, Equipment
Total Expense
Net Income
Cruz Auto Detail
Balance Sheet
June 30, 2005
$7,270.00
$1,690.00
900.00
400.00
160.00
540.00
30.00
520.00
4,240.00
$3,030.00
Liabilities
Accounts Payable
Wages Payable
Total Liabilities
Owner's Equity
L.A. Cruz, Capital
Total Liabilities and Owner's Equity
Cruz Auto Detail
Statement of Owner's Equity
For Month Ended June 30, 2005
L.A. Cruz, Capital, June 1, 2005
Net Income for June
Less Withdrawals for June
Increase in Capital
L.A. Cruz, Capital, June 30, 2005
Assets
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Less Accumulated Depreciation
Total Assets
$23,250.00
200.00
330.00
$51,500.00
520.00
50,980.00
$74,760.00
$4,440.00
290.00
$4,730.00
70,030.00
$74,760.00
$70,000.00
$3,030.00
3,000.00
Accounting is Fun!
From Drawing
30.00
$70,030.00
5-9
Ending Capital
Cruz Auto Detail
Income Statement
For Month Ended June 30, 2005
Revenue:
Income from Services
Expenses:
Wages Expense
Rent Expense
Advertising Expense
Utilities Expense
Supplies Expense
Insurance Expense
Depreciation Expense, Equipment
Total Expense
Net Income
Cruz Auto Detail
Balance Sheet
June 30, 2005
$7,270.00
$1,690.00
900.00
400.00
160.00
540.00
30.00
520.00
4,240.00
$3,030.00
Assets
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Less Accumulated Depreciation
Total Assets
Liabilities
Accounts Payable
Wages Payable
Total Liabilities
Owner's Equity
L.A. Cruz, Capital
Total Liabilities and Owner's Equity
Cruz Auto Detail
Statement of Owner's Equity
For Month Ended June 30, 2005
L.A. Cruz, Capital, June 1, 2005
Net Income for June
Less Withdrawals for June
Increase in Capital
L.A. Cruz, Capital, June 30, 2005
Balance Sheet
$23,250.00
200.00
330.00
$51,500.00
520.00
50,980.00
$74,760.00
$4,440.00
290.00
$4,730.00
70,030.00
$74,760.00
$70,000.00
$3,030.00
3,000.00
Accounting is Fun!
30.00
$70,030.00
From Drawing
5 - 10
Revenues, Expenses, & Withdrawals
Ending Capital
Cruz Auto Detail
Income Statement
For Month Ended June 30, 2005
Revenue:
Income from Services
Expenses:
Wages Expense
Rent Expense
Advertising Expense
Utilities Expense
Supplies Expense
Insurance Expense
Depreciation Expense, Equipment
Total Expense
Net Income
Cruz Auto Detail
Balance Sheet
June 30, 2005
$7,270.00
$1,690.00
900.00
400.00
160.00
540.00
30.00
520.00
4,240.00
$3,030.00
Liabilities
Accounts Payable
Wages Payable
Total Liabilities
Owner's Equity
L.A. Cruz, Capital
Total Liabilities and Owner's Equity
Cruz Auto Detail
Statement of Owner's Equity
For Month Ended June 30, 2005
L.A. Cruz, Capital, June 1, 2005
Net Income for June
Less Withdrawals for June
Increase in Capital
L.A. Cruz, Capital, June 30, 2005
Assets
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Less Accumulated Depreciation
Total Assets
$23,250.00
200.00
330.00
$51,500.00
520.00
50,980.00
$74,760.00
$4,440.00
290.00
$4,730.00
70,030.00
$74,760.00
$70,000.00
$3,030.00
3,000.00
Accounting is Fun!
30.00
$70,030.00
From Drawing
5 - 11
Start Fresh for Next Period,
July 1 To July 31, 2005
Cruz Auto Detail
Income Statement
For Month Ended July 31, 2005
Revenue:
Income from Services
Expenses:
Wages Expense
Rent Expense
Advertising Expense
Utilities Expense
Supplies Expense
Insurance Expense
Depreciation Expense, Equipment
Total Expense
Net Income
Cruz Auto Detail
Balance Sheet
July 31, 2005
$0.00
$0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
$0.00
See all the zeros?
Cruz Auto Detail
Statement of Owner's Equity
For Month Ended July 31, 2005
L.A. Cruz, Capital, July 1, 2005
Net Income for July
Less Withdrawals for July
Increase in Capital
L.A. Cruz, Capital, July 31, 2005
Accounting is Fun!
Assets
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Less Accumulated Depreciation
Total Assets
Liabilities
Accounts Payable
Wages Payable
Total Liabilities
Owner's Equity
L.A. Cruz, Capital
Total Liabilities and Owner's Equity
$23,250.00
200.00
330.00
$51,500.00
520.00
50,980.00
$74,760.00
$4,440.00
290.00
$4,730.00
70,030.00
$74,760.00
$70,030.00
$0.00
0.00
0.00
$70,030.00
All Revenues, Expenses, and
Withdrawals from last period are
reflected in the Capital account
5 - 12
Nominal or Temporary-Equity Accounts
• Accounts that apply to only one fiscal
period and that are to be closed at the
end of that fiscal period, such as
revenue, expense, Income Summary,
and Drawing accounts
• May also be described as all accounts
except assets, liabilities, and the Capital
account
Accounting is Fun!
5 - 13
Real or Permanent Accounts
• The accounts that remain open (assets,
liabilities, and the Capital account in
owner’s equity) and that have balances
that will be carried over to the next fiscal
period
Accounting is Fun!
5 - 14
Let’s Look at Closing with T Accounts
Real Accounts
“Permanent Accounts”
Assets
+
DR
=
CR
Liabilities
+
DR
CR
Nominal Accounts
“Temporary Equity
Accounts”
+
Owner's Equity
DR
+
CR
-
Expenses
+
DR
CR
+
Revenues
+
DR
CR
-
Drawing
+
Capital
+
DR
CR
DR
+
CR
Closed & Put Here
Accounting is Fun!
5 - 15
After Closing
Assets
+
DR
=
CR
Liabilities
+
DR
CR
+
Revenues, Expenses, Drawings
Closed & Put Here
Accounting is Fun!
Owner's Equity
DR
+
CR
+
Capital
DR
+
CR
5 - 16
Closing Using T-Accounts
Closing Procedure
1. Close revenue account(s) into Income
Summary
2. Close expense accounts into Income
Summary
3. Close Income Summary into Capital
4. Close Drawing into Capital
Accounting is Fun!
5 - 17
Accounting is Fun!
5 - 18
Income Summary
• An account brought into existence to have a
debit and credit for each closing entry
– It does not have plus or minus sign, just debits
and credits
• Revenue and expense account balances are
transferred to this account to allow calculation
of net income and net loss
• Serves as the in-between account, or
“holding tank,” before net income or net loss
transferred to the Capital account
Accounting is Fun!
5 - 19
Step 1: Close Revenue Accounts into Income
Summary
Accounting is Fun!
5 - 20
Step 2:Close
Expense
Accounts
into Income
Summary
Accounting is Fun!
5 - 21
Step 3: Close Income Summary into Capital
Accounting is Fun!
5 - 22
Step 4: Close Drawing into Capital Account
Accounting is Fun!
5 - 23
Closing Entries
• Entries into the journal made at the end
of a fiscal period to close off the
revenue, expense, and Drawing
accounts—that is, to make the balances
of the temporary-equity accounts equal
to zero
• Closing is also called clearing the
accounts
Accounting is Fun!
5 - 24
Journalize the Closing Entries
• Close the revenue accounts into Income
Summary
• Close the expense accounts into
Income Summary
• Close the Income Summary account
into the Capital account (transferring net
income or net loss to the Capital
account)
• Close the Drawing account into Capital
Be sure to label the entries “Closing Entries” before you begin to
enter them into the journal
Accounting is Fun!
5 - 25
Journalize Steps 1–2
Accounting is Fun!
5 - 26
Journalize Steps 1–4
Accounting is Fun!
5 - 27
Closing Hints
• When you want revenue and expense
accounts to go to zero:
– Create an offsetting debit or credit in Income
Summary to “balance it off”
• When closing Income Summary into Capital:
– Net income is a credit to Capital
– Net loss is a debit to Capital
• When closing Drawing into Capital:
– Drawing is a debit to Capital
– Remember: withdrawals are not expenses
Accounting is Fun!
5 - 28
Creating Journal Entries Directly from the
Work Sheet
• Revenue and expenses come from the
Income Statement columns
• Withdrawals come from the Balance
Sheet debit column
• Automatic check: if your closing number
from Income Summary to Capital is not
the same as net income, you made a
mistake
Accounting is Fun!
5 - 29
Post the Closing Entries
• Revenue, expense, and Drawing
accounts should end up with zero
balances
– Draw a line through both the debit and
credit balance columns to indicate that they
have been zeroed and closed
• Capital will more than likely have some
net change for the period
Be sure to write “Closing” in the Item column of the
ledger account
Accounting is Fun!
5 - 30
Posting Step 1 for Arch Copy Co.
Accounting is Fun!
5 - 31
Posting Steps 1-3 for Arch Copy Co.
Accounting is Fun!
5 - 32
Post-Closing Trial Balance
• The listing of the final balances of the real accounts
at the end of the fiscal period
• The opening balances for the next period
Accounting is Fun!
5 - 33
Post-Closing Trial Balance
• Accountant uses the post-closing trial balance to
make sure that DR = CR
– Have you done all the work correctly?
Accounting is Fun!
5 - 34
Errors: Post-Closing Trial Balance
• If DR ≠ CR
– Columns added correctly?
– Correct amounts transferred from the
ledger accounts?
– Adjusting entries posted correctly? New
balances correct?
– Closing entries posted correctly? New
balances correct?
– All nominal accounts closed?
Accounting is Fun!
5 - 35
Performance Objective 4
Define the following methods of
accounting: accrual basis and
modified cash basis
Accounting is Fun!
5 - 36
Accrual Basis
• An accounting method under which
revenue is recorded when it is earned,
regardless of when the cash is received,
and expenses are recorded when they
are incurred, regardless of when they
are paid
Accounting is Fun!
5 - 37
Modified Cash Basis
• An accounting method under which
revenue is recorded only when it is
received as cash
• Most expenses are recorded only when
they are paid in cash
– However, exceptions are made for
expenditures on items having a useful life
of more than one year and for certain
prepaid items
Accounting is Fun!
5 - 38
Modified Cash Basis Exceptions
• Expenditure for insurance premiums
can be prorated, or spread out, over the
fiscal periods covered
• Expenditures for long-lived items are
recorded as assets and later
depreciated as expenses over their
useful lives
Accounting is Fun!
5 - 39
Interim Statements
• Financial statements prepared during
the fiscal year, covering a period of time
less than twelve months
Accounting is Fun!
5 - 40
Prepare Interim Statements
Accounting is Fun!
5 - 41
Prepare Interim Statements
• Accountant prepares financial
statements from the work sheet
• Accountant does not journalize and post
the adjusting or closing entries until the
end of the fiscal year
Accounting is Fun!
5 - 42
Demonstration Problem
• On the following page is the completed
work sheet for:
Joe's Accounting Service
• We are going to complete the following
tasks:
– Journalize the closing entries
– Create the post-closing trial balance
Accounting is Fun!
5 - 43
Joe's Accounting Service
Work Sheet
For The Month Ended June 30, 2003
Trial Balance
DR
CR
Account Name
Cash
Adjustments
DR
CR
Adjusted Trial Balance
DR
CR
Income Statement
DR
CR
Balance Sheet
DR
CR
4,381.00
4,381.00
4,381.00
Accounts Receivable
578.00
578.00
578.00
Prepaid Property Insurance
397.00
a)
200.00
197.00
197.00
Prepaid Auto Insurance
1,138.00
b)
100.00
1,038.00
1,038.00
Equipment
5,713.00
5,713.00
5,713.00
2,487.00
Accumulated Depreciation, Equipment
Accounts Payable
J. Pham, Capital
J. Pham, Drawing
c)
250.00
2,737.00
2,737.00
997.00
997.00
997.00
5,964.00
5,964.00
5,964.00
1,800.00
Professional Fees
1,800.00
8,131.00
Salary Expense
2,000.00
1,800.00
8,131.00
d)
400.00
8,131.00
2,400.00
2,400.00
Advertising Expense
887.00
887.00
887.00
Utilities Expense
685.00
685.00
685.00
17,579.00 17,579.00
Property Insurance Expense
a)
200.00
200.00
200.00
Auto Insurance Expense
b)
100.00
100.00
100.00
Depreciation Expense, Equipment
c)
250.00
250.00
250.00
Salaries Payable
d)
950.00
Net Income
400.00
950.00
400.00
18,229.00 18,229.00
400.00
4,522.00
8,131.00
3,609.00
8,131.00
Accounting is Fun!
13,707.00 10,098.00
3,609.00
8,131.00
13,707.00 13,707.00
5 - 44
Line #
General Journal
Closing: Step 1
Date
1
2
2003
3 June
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Page J43
Post.
Ref.
Description
Debit
Credit
Adjusting Entries
30 Property Insurance Expense
Prepaid Property Insurance
650
160
200.00
30 Auto Insurance Expense
Prepaid Auto Insurance
651
161
100.00
30 Depreciation Expense, Equipment
Accumulated Depreciation, Equipment
620
120
250.00
30 Salary Expense
Salaries Payable
615
230
400.00
200.00
100.00
250.00
400.00
Closing Entries
30 Professional Fees
Income Summary
Accounting is Fun!
8,131.00
8,131.00
5 - 45
Joe's Accounting Service
Work Sheet
For The Month Ended June 30, 2003
Trial Balance
DR
CR
Account Name
Cash
Adjustments
DR
CR
Adjusted Trial Balance
DR
CR
Income Statement
DR
CR
Balance Sheet
DR
CR
4,381.00
4,381.00
4,381.00
Accounts Receivable
578.00
578.00
578.00
Prepaid Property Insurance
397.00
a)
200.00
197.00
197.00
Prepaid Auto Insurance
1,138.00
b)
100.00
1,038.00
1,038.00
Equipment
5,713.00
5,713.00
5,713.00
2,487.00
Accumulated Depreciation, Equipment
Accounts Payable
J. Pham, Capital
J. Pham, Drawing
c)
250.00
2,737.00
2,737.00
997.00
997.00
997.00
5,964.00
5,964.00
5,964.00
1,800.00
Professional Fees
1,800.00
8,131.00
Salary Expense
2,000.00
1,800.00
8,131.00
d)
400.00
8,131.00
2,400.00
2,400.00
Advertising Expense
887.00
887.00
887.00
Utilities Expense
685.00
685.00
685.00
17,579.00 17,579.00
Property Insurance Expense
a)
200.00
200.00
200.00
Auto Insurance Expense
b)
100.00
100.00
100.00
Depreciation Expense, Equipment
c)
250.00
250.00
250.00
Salaries Payable
d)
950.00
Net Income
400.00
950.00
400.00
18,229.00 18,229.00
400.00
4,522.00
8,131.00
3,609.00
8,131.00
Accounting is Fun!
13,707.00 10,098.00
3,609.00
8,131.00
13,707.00 13,707.00
5 - 46
Closing: Step 2
Line #
General Journal
Date
1
2
2003
3 June
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Page J43
Post.
Ref.
Description
Debit
Credit
Adjusting Entries
30 Property Insurance Expense
Prepaid Property Insurance
650
160
200.00
30 Auto Insurance Expense
Prepaid Auto Insurance
651
161
100.00
30 Depreciation Expense, Equipment
Accumulated Depreciation, Equipment
620
120
250.00
30 Salary Expense
Salaries Payable
615
230
400.00
200.00
100.00
250.00
400.00
Closing Entries
30 Professional Fees
Income Summary
8,131.00
30 Income Summary
Salary Expense
Advertising Expense
Utilities Expense
Property Insurance Expense
Auto Insurance Expense
Depreciation Expense, Equipment
4,522.00
Accounting is Fun!
8,131.00
2,400.00
887.00
685.00
200.00
100.00
250.00
5 - 47
Closing: Step 3
Line #
General Journal
Date
1
2
2003
3 June
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Page J43
Post.
Ref.
Description
Debit
Credit
Adjusting Entries
30 Property Insurance Expense
Prepaid Property Insurance
650
160
200.00
30 Auto Insurance Expense
Prepaid Auto Insurance
651
161
100.00
30 Depreciation Expense, Equipment
Accumulated Depreciation, Equipment
620
120
250.00
30 Salary Expense
Salaries Payable
615
230
400.00
Closing Entries
30 Professional Fees
Income Summary
200.00
100.00
250.00
400.00
8,131.00
8,131.00
30 Income Summary
Salary Expense
Advertising Expense
Utilities Expense
Property Insurance Expense
Auto Insurance Expense
Depreciation Expense, Equipment
4,522.00
30 Income Summary
J. Pham, Capital
3,609.00
Accounting is Fun!
2,400.00
887.00
685.00
200.00
100.00
250.00
3,609.00
5 - 48
Joe's Accounting Service
Work Sheet
For The Month Ended June 30, 2003
Trial Balance
DR
CR
Account Name
Cash
Adjustments
DR
CR
Adjusted Trial Balance
DR
CR
Income Statement
DR
CR
Balance Sheet
DR
CR
4,381.00
4,381.00
4,381.00
Accounts Receivable
578.00
578.00
578.00
Prepaid Property Insurance
397.00
a)
200.00
197.00
197.00
Prepaid Auto Insurance
1,138.00
b)
100.00
1,038.00
1,038.00
Equipment
5,713.00
5,713.00
5,713.00
2,487.00
Accumulated Depreciation, Equipment
Accounts Payable
J. Pham, Capital
J. Pham, Drawing
250.00
2,737.00
2,737.00
997.00
997.00
997.00
5,964.00
5,964.00
5,964.00
1,800.00
Professional Fees
Salary Expense
c)
1,800.00
8,131.00
2,000.00
1,800.00
8,131.00
d)
400.00
8,131.00
2,400.00
2,400.00
Advertising Expense
887.00
887.00
887.00
Utilities Expense
685.00
685.00
685.00
17,579.00 17,579.00
Property Insurance Expense
Check
Depreciation Expense, EquipmentNumber
Salaries Payable
for Step 3
Closing
Net Income
Entry
Auto Insurance Expense
Accounting is Fun!
a)
200.00
200.00
200.00
b)
100.00
100.00
100.00
c)
250.00
250.00
250.00
d)
950.00
400.00
950.00
400.00
18,229.00 18,229.00
400.00
4,522.00
8,131.00
3,609.00
8,131.00
13,707.00 10,098.00
3,609.00
8,131.00
13,707.00 13,707.00
5 - 49
Closing: Step 4
Line #
General Journal
Date
1
2
2003
3 June
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Page J43
Post.
Ref.
Description
Debit
Credit
Adjusting Entries
30 Property Insurance Expense
Prepaid Property Insurance
650
160
200.00
30 Auto Insurance Expense
Prepaid Auto Insurance
651
161
100.00
30 Depreciation Expense, Equipment
Accumulated Depreciation, Equipment
620
120
250.00
30 Salary Expense
Salaries Payable
615
230
400.00
200.00
100.00
250.00
400.00
Closing Entries
30 Professional Fees
Income Summary
8,131.00
30 Income Summary
Salary Expense
Advertising Expense
Utilities Expense
Property Insurance Expense
Auto Insurance Expense
Depreciation Expense, Equipment
4,522.00
30 Income Summary
J. Pham, Capital
3,609.00
30 J. Pham, Capital
J. Pham, Drawing
1,800.00
Accounting is Fun!
8,131.00
2,400.00
887.00
685.00
200.00
100.00
250.00
3,609.00
1,800.00
5 - 50
Post In Order To Get Information Into Ledger
Accounts
General Ledger
Line #
Account:
Date
1
2003
2 June
3
4
5
6
Professional Fees
Item
15
Post.
Ref.
Account No:
Debit
J 40
Credit
Debit
411
Balance
Credit
8,131.00
8,131.00
General Ledger
Line #
Account:
Date
1
2003
2 June
3
4
5
6
Professional Fees
Item
Post.
Ref.
15
J 40
30 Closing J43
Accounting is Fun!
Account No:
Debit
Credit
8,131.00
Debit
411
Balance
Credit
8,131.00
8,131.00
5 - 51
Post Reference!
Line #
General Journal
Date
1
2
2003
3 June
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Page J43
Post.
Ref.
Description
Debit
Credit
Adjusting Entries
30 Property Insurance Expense
Prepaid Property Insurance
650
160
200.00
30 Auto Insurance Expense
Prepaid Auto Insurance
651
161
100.00
30 Depreciation Expense, Equipment
Accumulated Depreciation, Equipment
620
120
250.00
30 Salary Expense
Salaries Payable
615
230
400.00
411
8,131.00
200.00
100.00
250.00
400.00
Closing Entries
30 Professional Fees
Income Summary
8,131.00
30 Income Summary
Salary Expense
Advertising Expense
Utilities Expense
Property Insurance Expense
Auto Insurance Expense
Depreciation Expense, Equipment
4,522.00
30 Income Summary
J. Pham, Capital
3,609.00
30 J. Pham, Capital
J. Pham, Drawing
1,800.00
Accounting is Fun!
2,400.00
887.00
685.00
200.00
100.00
250.00
3,609.00
1,800.00
5 - 52
Create Post-Closing Trial Balance
Joe's Accounting Service
Post-Closing Trial Balance
June 30, 2003
Cash
Accounts Receivable
Prepaid Property Insurance
Prepaid Auto Insurance
Equipment
Accumulated Depreciation, Equipment
Accounts Payable
Salaries Payable
J. Pham, Capital
Accounting is Fun!
4,381.00
578.00
197.00
1,038.00
5,713.00
2,737.00
997.00
400.00
7,773.00
11,907.00 11,907.00
5 - 53