Closing Entries and Post-Closing Trial Balance 结账以及结账后试算平衡表 Chapter 4 Closing Entries and Post-Closing Trial Balance 结账以及结账后试算平衡表

Post entries to the ledger accounts. Journalize transactions. The Accounting Cycle Post entries to the ledger accounts. Journalize transactions. Make end-of-year adjustments. Prepare trial balance. Journalize and post closing entries. Prepare financial statements. Prepare adjusted trial balance. Prepare after closing trial balance. 3

Permanent/real accounts vs. temporary/nominal accounts Permanent accounts or real accounts (永久性账户或实账户） --- Accounts that remain open all the time until the business is liquidated. Temporary accounts or nominal accounts (临时性账户或虚账户） --- Accounts that apply to only one accounting period and that are closed at the end of that accounting period.

Permanent/real accounts vs. temporary/nominal accounts Assets = Liabilities + Capital + Revenue – Expenses – Drawing Permanent accounts Temporary accounts Open Closed

Closing the Temporary Equity Accounts The closing （结账）process gets the temporary/nominal accounts （临时性/虚账户） ready for the next accounting period. 4

Closing entries (结账分录） --- journal entries made at the end of a fiscal year to reduce the balances of the temporary accounts to zero. Expense Revenue Dr Cr Dr Cr Bal. 100 Closing 100 Closing 100 Bal. 100 0 0

Income Summary (收益总汇/本年利润） Expenses bal. Revenue Bal. Net loss Net income (if R< E) (if R > E)

Closing the “Temporary” Equity Accounts The closing process gets the temporary accounts ready for the next accounting period. Close Revenue accounts to Income Summary. Close Expense accounts to Income Summary. Close Income Summary account to Owner’s Capital. Close Withdrawals to Owner’s Capital. 4

Closing Entries for Revenue Accounts

Closing Entries for Expense Accounts Net Income

Closing the Income Summary Account The balance in Income Summary is now zero.

Closing the Owner’s Drawing Account

Closing procedures summary Expenses Revenue + - - + Bal. Closing Closing Bal. Income Summary Expenses Revenue Closing Net income Net loss Closing drawing Capital + - - + Bal. Closing Drawing Bal. Net loss Net income Closing procedures summary

Journalizing and posting Journalize and post closing entries. On page 90-91. Compound entry. Post-closing trial balance on page 95.

Assignments Problem 3 (p 99) Self-test comprehensive problems I

End of Chapter 4 4