College Accounting 11 th Edition Nobles McQuaig Bille

1. 5 chapter College Accounting 11th Edition Nobles McQuaig Bille Closing Entries and the Post-Closing Trial Balance

2. Learning Objective

3. Steps in the Accounting Cycle • Step 1. _____________________________ • Step 2. _____________________________ • Step 3. _____________________________ • Step 4. _____________________________ • Step 5. _____________________________ • Step 6. _____________________________ • Step 7. _____________________________ • Step 8. _____________________________ • Step 9. _____________________________

5. Purpose of Closing Entries • The purpose of _________________ is to ______(or ______) the ________________ or ______ accounts. • Closing entries are made ______ the last ________________ and ______ the ____________________ have been prepared. • Closing entries update the ________________ account.

6. Purpose of Closing Entries

7. Practice Exercise 1

8. Learning Objective

9. Procedure for Closing • The procedure for closing is simply to balance off the account; in other words, to make the balance ______________. • An account to be closed has a debit balance of $870. To make the balance equal to zero, we _____ the account for $870.

10. Procedure for Closing • The procedure for closing is simply to balance off the account; in other words, to make the balance ______________. • An account to be closed has a credit balance of $1,400. To make the balance equal to zero, we ______the account for $1,400.

11. Steps in the Closing Procedure • Step 1. _____________________________________ • Step 2. _____________________________________ • Step 3. _____________________________________ • _____________________________________ • Step 4. _____________________________________

12. Closing the Accounts for Conner’s Whitewater Adventure

13. 2,832 1,250 460 620 225 625 512 6,524

15. In case there is a ___________ , Income Summary and Capital are both _________ . Assume J. Doe Company experienced a $600 ___________.

17. Computerized Accounting • With accounting software, each time the financials statements are prepared, the capital account is updated. If accounting software is being used, perform the following steps: • ____________________________. • ____________________________. • ___________________________________________________________.

18. Closing Entries Taken Directly from the Work Sheet • You can gather information for the closing entries either directly from the _________ accounts or from the ______________ . • You may plan the closing entries by balancing off all the figures that appear in the _________________________columns. • In the Item column of the ledger account, we write the word “_____________”.

19. Posting the Closing Entries • Accountants call the accounts that are to be closed (such as ___________ , ___________ , ___________ , and ___________ ) ___________ (_______________) accounts. • Accountants call the accounts that remain ______ from one fiscal period to the next ___________ (___________ ) accounts.

20. Practice Exercise 2

23. Learning Objective

24. The Post-Closing Trial Balance • To verify the balances of the accounts that remain _______, a ____________________________ is prepared using the final balance figures from the _______accounts. • Note that the accounts listed in the post-closing trial balance are the _______ or _______ accounts.

25. Tracking Down an Error • If the totals of the post-closing trial balance are not equal, here’s the recommended procedures for tracking down the error. • _________________________________________. • ____________________________________________________________________________________________. • ____________________________________________________________________________________________. • ____________________________________________________________________________________________________________________________________________________.

26. Practice Exercise 3

27. Learning Objective

28. Cash and Accrual Accounting • Under the ______________________, _________ is _________ when it is _______________ , and generally _________ are recorded when they are _________ . • Under the ______________________, _________ is _________ when it is _________ , and _________ are recorded when they are _________ .

29. Cash versus Accrual • Roby Hair Salon pays $6,000 cash in July for the current month (July) and the following five months of rent (August-December). Recording rent expense under cash basis and accrual basis.

30. Practice Exercise 4

31. Learning Objective

32. Interim Statements • Financial statements prepared during the fiscal year, for periods of _____ than _____ _____ , are called ________________________. • A business may prepare the financial statements monthly to provide up-to-date information about the results of operations.

34. Practice Exercise 5

36. 5 chapter College Accounting 11th Edition Nobles McQuaig Bille Closing Entries and the Post-Closing Trial Balance The End