27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Closing the accounts of a merchandiser

From the following list, identify the accounts that should be closed to Tim Button, Capital at the end of the fiscal year under a perpetual inventory system: (a) Accounts Receivable, (b) Cost of Merchandise Sold, (c) Customer Refunds Payable, (d) Estimated Returns Inventory, (c) Merchandise Inventory, (f) Sales, (g) Supplies, (h) Supplies Expense, (i) Tim Button, Drawing, (j) Wages Expense.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the income summary account.

The following accounts are to be closed at the end of the year:

  • Revenue accounts
  • Expense accounts
  • Income Summary account
  • Dividend account

To Identify: The accounts that should be closed at the end of the fiscal year.


The following are the four-steps of closing process for a merchandising company.

  • Close all the revenue accounts to the income summary account...

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