Accounting Bellwork 3 rd Hour: How is the Income Summary account different from other temporary capital accounts?

1.It is used only at the end of the fiscal year to summarize the balances from the revenue and expense accounts. 2.It does not have a normal balance, which means that it does not have an increase or a decrease side. Accounting Bellwork

Plans for today Grade HomeworkHomework Begin Ch10-2 Assignment

Section 2Posting Closing Entries and Preparing a Post- Closing Trial Balance What You’ll Learn  How to record closing entries in the general ledger. The purpose of the Income Summary account.  The purpose of a post-closing trial balance.  How to prepare a post-closing trial balance. What You’ll Learn  How to record closing entries in the general ledger. The purpose of the Income Summary account.  The purpose of a post-closing trial balance.  How to prepare a post-closing trial balance.

Why It’s Important A post-closing trial balance verifies that the closing entries are properly recorded in the general ledger and that you are ready to start the next accounting period. Why It’s Important A post-closing trial balance verifies that the closing entries are properly recorded in the general ledger and that you are ready to start the next accounting period. Section 2Posting Closing Entries and Preparing a Post-Closing Trial Balance (con’t.) Key Term  post-closing trial balance Key Term  post-closing trial balance

Completing the Eighth Step in the Accounting Cycle: Posting Closing Entries to the General Ledger Section 2Posting Closing Entries and Preparing a Post-Closing Trial Balance (con’t.) Only difference is that you write the word closing in the description column.

The Ninth Step in the Accounting Cycle: Preparing a Post-Closing Trial Balance Section 2Posting Closing Entries and Preparing a Post-Closing Trial Balance (con’t.)  Prepared to make sure total debits equal total credits after the closing entries are posted.  Only accounts with balances are listed (permanent accounts).  Prepared to make sure total debits equal total credits after the closing entries are posted.  Only accounts with balances are listed (permanent accounts).

Demonstration Problem 10-6

permanent Temporary

Allison’s Repair Shop Post-Closing Trial Balance December 31, Cash In Bank Specific date Accounts Receivable-C. Smythe Accounts Receivable-Bell & Sons Computer Equipment Repair Equipment Accounts Payable -Midtown Computers Accounts Payable –Nagle Supplies A. Degaro, Capital Total

Check Your Understanding p.246. Thinking Critically 1 & 2 Problem 10-3 and 10-4 p248, Understanding Accounting Concepts and Procedures Audit with Alex Thinking Critically 1 & 2 Problem 10-3 and 10-4 p248, Understanding Accounting Concepts and Procedures Audit with Alex Section 2Posting Closing Entries and Preparing a Post-Closing Trial Balance (con’t.)