Accounting
Accounting
Accounting
PROJECT IN ENGINEERING
ACCOUNTING ( ES-322 )
Kleint T. Ocial
BSCE – 4A
Liabilities
Owner’s Equity
JOURNALIZING
The following are the given data for the end-of-the month adjustments in Ocial’s
Machine Shop:
1. 1% of the outstanding receivable account is estimated to be
doubtful of collection.
The post-closing trial balance is a list of all accounts and their balances
after the closing entries have been journalized and posted to the ledger. In other
words, the post-closing trial balance is a list of accounts or permanent accounts
that still have balances after the closing entries have been made.
This accounts list is identical to the accounts presented on the balance
sheet. This makes sense because all of the income statement accounts have
been closed and no longer have a current balance. The purpose of preparing the
post-closing trial balance is verify that all temporary accounts have been closed
properly and the total debits and credits in the accounting system equal after the
closing entries have been made.
CLOSING ENTRIES
Closing entries, also called closing journal entries, are entries made at the
end of an accounting period to zero out all temporary accounts and transfer their
balances to permanent accounts. In other words, the temporary accounts are
closed or reset at the end of the year. This is commonly referred to as closing the
books.
At the end of the year, all the temporary accounts must be closed or reset,
so the beginning of the following year will have a clean balance to start with. In
other words, revenue, expense, and withdrawal accounts always have a zero
balance at the start of the year because they are always closed at the end of the
previous year.
Income Statement Accounts
Income
Expense