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Accounting I Chapter 9 – Recording Adjusting & Closing Entries for a Service Business
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TERMS REVIEW adjusting entries permanent accounts temporary accounts
closing entries Lesson 9-2, page 209
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TERMS REVIEW Adjusting Entries
Journal entries recorded to update general ledger accounts at the end of a fiscal period. Lesson 9-1, page 198
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TERMS REVIEW Permanent Accounts
Accounts used to accumulate information from one fiscal period to the next. Lesson 9-2, page 203
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TERMS REVIEW Temporary Accounts
Accounts used to accumulate information until it is transferred to the owner’s capital account. Lesson 9-2, page 203
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TERMS REVIEW Closing Entries
Journal entries used to prepare temporary accounts for a new fiscal period. Lesson 9-2, page 203
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ADJUSTING ENTRY FOR SUPPLIES
Lesson 9-1 ADJUSTING ENTRY FOR SUPPLIES 3 1 2 4 1. Write the heading. 2. Write the date. 3. Record the debit. 4. Record the credit. Lesson 9-1, page 200
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ADJUSTING ENTRY FOR PREPAID INSURANCE
2 1 3 1. Write the date. 2. Record the debit. 3. Record the credit. Lesson 9-1, page 201
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Work Together & On Your Own – Page 202
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CLOSING ENTRY FOR AN INCOME STATEMENT ACCOUNT WITH A CREDIT BALANCE
Lesson 9-1 CLOSING ENTRY FOR AN INCOME STATEMENT ACCOUNT WITH A CREDIT BALANCE 3 (Debit to close) 1 2 4 1. Write the heading. 2. Write the date. 3. Record the debit. 4. Record the credit. Lesson 9-2, page 205
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CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES
1. Write the date. 2. Income Summary. (Credit to close) 3 3. Record the credit. 4. Record the debit. 2 4 1 Lesson 9-2, page 206
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CLOSING ENTRY TO RECORD NET INCOME OR LOSS AND CLOSE THE INCOME SUMMARY ACCOUNT
(Capital: credit to record net income) (Income Summary: debit to close) 2 1 3 1. Write the date. 2. Record the debit. 3. Record the credit. Lesson 9-2, page 207
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CLOSING ENTRY FOR THE OWNER’S DRAWING ACCOUNT
2 (Capital: credit to close) 1 3 1. Write the date. 2. Record the debit. 3. Record the credit. Lesson 9-2, page 208
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Work Together & On Your Own – Page 209
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TERMS REVIEW post-closing trial balance accounting cycle
Lesson9-3, page 215
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TERMS REVIEW Post-Closing Trial Balance
A trial balance prepared after the closing entries are posted. Lesson 9-3, page 213
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TERMS REVIEW Accounting Cycle
The series of accounting activities included in recording financial information for a fiscal period. Lesson 9-3, page 214
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POST-CLOSING TRIAL BALANCE
1. Write the heading. 1 2. Write titles of all general ledger accounts with balances in the Account Title column. 2 3 3. Write each account’s balance. 4 6 4. Rule a single line. 8 7 5 5. Compare the two column totals. 6. Write Totals. 7. Write the column totals. 8. Rule double lines. Lesson 9-3, page 213
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ACCOUNTING CYCLE FOR A SERVICE BUSINESS
1. Source documents checked for accuracy, and transactions are analyzed. 1 2 2. Transactions are recorded in a journal. 8 3. Journal entries are posted to the general ledger. 3 4. Work sheet is prepared. 5. Financial statements are prepared. 7 4 6. Adjusting and closing entries are journalized. 6 7. Adjusting and closing entries are posted. 5 8. A post-closing trial balance is prepared. Lesson 9-3, page 214
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Work Together & On Your Own – Page 215
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