1. Adjusting, Closing, and Reversing Entries for a Corporation
LESSON 22-4
6/1/2018
LESSON 22-4
Adjusting, Closing, and Reversing Entries for a Corporation

2. ADJUSTING ENTRIES
page 654
LESSON 22-4

3. CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCES
page 655 1 2
1. Enter the balance of accounts in the Income Statement credit column as a debit.
2. Enter the total of the debit entries as a credit to Income Summary.
LESSON 22-4

4. CLOSING ENTRY FOR ACCOUNTS WITH DEBIT BALANCES
page 656
1. Enter the account title Income Summary. 1 3
2. Enter the balance of every account in the Income Statement debit column as a credit. 2
3. Enter the total of the credit entries as a debit to Income Summary.
LESSON 22-4

5. CLOSING ENTRY TO RECORD NET INCOME
page 657 1 2
1. Debit Income Summary.
2. Credit Retained Earnings.
LESSON 22-4

6. CLOSING ENTRY FOR DIVIDENDS
page 657 1 2
1. Debit Retained Earnings.
2. Credit Dividends.
LESSON 22-4

7. REVERSING ENTRIES
page 658
1. Reverse the entry that created a balance in Interest Receivable. 1
2. Reverse the entry that created a balance in Interest Payable.
3. Reverse the entry that created a balance in Federal Income Tax Payable. 2 3
LESSON 22-4

8. ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATION
page 659
1. Source documents are checked for accuracy, and transactions are analyzed into debit and credit parts. 1 2
2. Transactions, from information on source documents, are recorded in journals. 3
3. Journal entries are posted to the accounts payable, accounts receivable, and general ledgers. 4
4. Schedules of accounts payable and accounts receivable are prepared from the subsidiary ledgers.
(continued on next slide)
LESSON 22-4

9. ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATION
page 659
5. A work sheet, including a trial balance and an adjustment for federal income tax expense, is prepared from the general ledger. 9
6. Financial statements are prepared from the work sheet. 8
7. Adjusting and closing entries are journalized from the work sheet and posted to the general ledger. 5
8. A post-closing trial balance of the general ledger is prepared. 7
9. Reversing entries are journalized and posted to the general ledger. 6
(continued from previous slide)
LESSON 22-4