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LESSON 22-4

LESSON 22-4. Adjusting, Closing, and Reversing Entries for a Corporation. ADJUSTING ENTRIES. page 654. 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.

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LESSON 22-4

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  1. 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. 1 REVERSING ENTRIES page 658 1. Reverse the entry that created a balance in Interest Receivable. 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. 2 1 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

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