What types of accounts must be closed at the end of the accounting period? What
ID: 2426319 • Letter: W
Question
What types of accounts must be closed at the end of the accounting period?
What acronym might help us remember which accounts need to be closed?
What are the four steps necessary to complete the closing process?
What entry is made to the revenue account to zero it out?
Where is the offsetting entry made when the revenue account is zeroed out?
What entry is made to all expense accounts to zero them out?
When the expense accounts are zeroed out, what offsetting entry is made?
Are the adjusting entries at the end of the period always made in pairs of one debit and one credit entry? Why or why not?
If revenues exceed the sum of expenses and owner withdrawals for the period, what is the net effect on Owner’s Equity?
What types of accounts must be closed at the end of the accounting period?
What acronym might help us remember which accounts need to be closed?
What are the four steps necessary to complete the closing process?
What entry is made to the revenue account to zero it out?
Where is the offsetting entry made when the revenue account is zeroed out?
What entry is made to all expense accounts to zero them out?
When the expense accounts are zeroed out, what offsetting entry is made?
Are the adjusting entries at the end of the period always made in pairs of one debit and one credit entry? Why or why not?
If revenues exceed the sum of expenses and owner withdrawals for the period, what is the net effect on Owner’s Equity?
Explanation / Answer
1 Temporary Accounts are closed at the end of each accounting period. Temporary accounts include all of the income statement accounts, , the sole proprietor's drawing account, the income summary account, and any other account that is used for keeping a tally of the current year amounts.
2 he easiest way to remember what accounts need to be closed and the manner in which they're closed is to remember the acronym REID.REID stands for Revenue, Expense, Income summary, and Dividend.
3 There are Four Basic Steps to Complete the closing Process
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