Accounting Question - Closing Entries???
Accounting Question - Closing Entries???
Accounting Question - Closing Entries???
Are they just for T-Accounts or are there also Closing Entries on the General Journal Entries also?? I got the Adjusting Entries already..
If there ARE closing entries on the Journal Entries - how do you do them??
Answers:
blackwaltz: i was a bit fuzzy on closing entries too, but i believe there are entries in the general journal. the t-accounts are just to help you see what you have to debit or credit when you close it. then you just transfer the accounts and amount to the general journal under closing entries
(e.g. when you close out the revenue account it shows as:
Blank Revenue__________________$1000
___Income Summary__________________$1000
something like that)
2006-11-30 00:15:28
2006-11-30 00:15:28
Chosen Answer
Briano Pitt: Hi Tasksgirl..... I need all your attention please! I suppose you work everyday with an automated Accounting System, like Accpac, QuickBooks, Salomon, etc.... Entries closing (concepts and definitions) : 1) Closing entries are made to close revenues, cost of goods, operational costs and any other account involved to calculate the compay's NET INCOME. 2) Net Income is the result that you read at the end of an INCOME STATEMENT report. 3) You MUST enter Closing entries once in a year. 4) I have seen two types of Closing Entries: - Manually - Automatically Manually Closing Entries are done when automatically option does not exist. It is a obsolete system. Automatically is done when you close the fiscal year. If this option exists, never enter Closing Entries manually. It will ends on critical errors. Some Accounting Systems, like Accpac, looks for marked accounts as Revenues, Costs of Goods, Expenses, Other Incomes, etc... and create transactions to close them. For instance: A revenue account balance is -15,200,000.oo A cost of good account balance is 7,100,000.oo An expense account balance is 3,000,000.oo Net Income will be -5,100,000.oo (Revenue - CoGs - Expenses) Negatives signs are shown only to show this example only, but usually accounting system do not show them unless it be needed. ok, Accpac will create a batch entry as follow: Revenue account 15,200,000.oo CoGs account - 7,100,000.oo Expense account - 3,000,000.oo Earning Account - 6,100,000.oo (Equity account) Earning account is entered to balance this batch. Now, Net Income will part of Company's Equity account. Next time you run a Income Statement, Net income will be ZERO, because it was closed by Closing Entries. This result is now in Equity Accounts. that's it... hope that helps you .... good luck!
2006-12-02 04:36:43
Briano Pitt: Hi Tasksgirl..... I need all your attention please! I suppose you work everyday with an automated Accounting System, like Accpac, QuickBooks, Salomon, etc.... Entries closing (concepts and definitions) : 1) Closing entries are made to close revenues, cost of goods, operational costs and any other account involved to calculate the compay's NET INCOME. 2) Net Income is the result that you read at the end of an INCOME STATEMENT report. 3) You MUST enter Closing entries once in a year. 4) I have seen two types of Closing Entries: - Manually - Automatically Manually Closing Entries are done when automatically option does not exist. It is a obsolete system. Automatically is done when you close the fiscal year. If this option exists, never enter Closing Entries manually. It will ends on critical errors. Some Accounting Systems, like Accpac, looks for marked accounts as Revenues, Costs of Goods, Expenses, Other Incomes, etc... and create transactions to close them. For instance: A revenue account balance is -15,200,000.oo A cost of good account balance is 7,100,000.oo An expense account balance is 3,000,000.oo Net Income will be -5,100,000.oo (Revenue - CoGs - Expenses) Negatives signs are shown only to show this example only, but usually accounting system do not show them unless it be needed. ok, Accpac will create a batch entry as follow: Revenue account 15,200,000.oo CoGs account - 7,100,000.oo Expense account - 3,000,000.oo Earning Account - 6,100,000.oo (Equity account) Earning account is entered to balance this batch. Now, Net Income will part of Company's Equity account. Next time you run a Income Statement, Net income will be ZERO, because it was closed by Closing Entries. This result is now in Equity Accounts. that's it... hope that helps you .... good luck!
2006-12-02 04:36:43