Closing Entries

Calculate profit:

R = 40 000

E = 10 000

A = 25 000

L = 15 000

• 90 000

• 60 000

• 50 000

• 30 000

Revenue, Expenses and Profit are reported in...

• Statement of Financial Position

• Cash Flow Statement

• Statement of Profit or Loss

• Trial Balance

Which accounts are closed off?

• Revenues

• Assets

• Expenses

• Liabilities

Identify the account that is not closed off?

• Service Fees Revenue

• Wages

• Buildings

• Electricity

Identify the correct statement regarding the Accounting Equation.

• Revenues are on the debit side

• Expenses are credit in nature

• Liabilities are on the debit side

• Revenues are credit nature

What is the correct order for closing off accounts?

• Revenues, expenses, then capital (profit)

• REALOE

• A, E, L, OE, R

• Revenues, assets, expenses

Identify the name of the account used to close off revenues and expenses.

• Drawings

• Profit and Loss

• Closing Account

• Owner's Equity

Identify the correct processes for recording closing entries for revenues in the General Journal.

• Revenues are debited

• Revenues are credited

• Profit and Loss is credited

• Profit and Loss is debited

Identify the correct processes for recording closing entries for expenses in the General Journal.

• Debit Profit and Loss, Credit Expenses

• Debit Closing Account, Credit Expenses

• Debit Expenses, Credit Profit and Loss

• Debit Expenses, Credit Closing Account

Identify the correct statements in terms of the purpose of closing entries.

• Reset revenues and expense accounts to zero at the end of the financial year

• Calculate profit for the year

• Close assets and liabilities so that they can be reported on the following year

• Allows the business to measure performance and this is reported on in the Statement of Profit or Loss.