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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

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Using the work sheet provided in Checkpoint Exercise 1, prepare closing entries in general journal form.

To determine

Prepare closing entries in general journal form.

Explanation

Closing entries: The journal entries prepared to close the temporary accounts to permanent account are referred to as closing entries. The revenue, expense, and dividends accounts are referred to as temporary accounts because the information and figures in these accounts is held temporarily and consequently transferred to permanent account at the end of accounting year.

Prepare closing entries in general journal form:

DateAccounts and Explanation

Debit

 ($)

Credit ($)
August 31Professional fees (SE–)5,000 
 Income Summary (SE+) 5,000
 (To close the revenue account.)  
    
August 31Income summary (SE–)1,800 
 Wages expense (SE+) 1,000
 Rent expense (SE+) 700
 Depreciation expense (SE+) 100
 (To close the expense accounts.)  
    
August 31Income Summary (SE–)3,200 
           JF, Capital (SE+) 3,200
 (To close the income summary accounts)  
    
August 31JF, Capital (SE–)300 
 JF, Drawings (SE+) 300
 (To close drawings account...

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