ACCOUNTING - 5

is a columnar sheet of paper used to summarize information such as adjusting and closing entries to facilitate preparation of the financial statements.

are entries prepared at the end of the accounting period to bring the balances of the temporary or nominal account to zero, so that they will be ready to receive data for the next accounting period.

a temporary account or clearing account

The balances in the revenue account are transferred to the income summary account by debiting each revenue account for the amount of its balance, and crediting the income summary account for the total revenue.

The balances in the expense account are transferred to the income summary account by debiting the income summary account for the total expense, and crediting each expense account for the amount of its balance.

The balances in the income summary account are transferred to the owner’s capital.

credit balance - debiting income summary, crediting the owner’s capital account

debiting the owner’s capital account, crediting the income summary account

The balance of the owner’s drawing account is transferred to the owner’s capital account by debiting the capital account for the amount of the withdrawals, and crediting the drawing account for its balance.

will serve as the beginning balance of the next accounting period.