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LESSON 16-2. Recording Closing Entries for Income Statement Accounts. THE INCOME SUMMARY ACCOUNT. page 487. 3. 3. CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCES. page 488. 1. 2. 4. 1. Heading. 3. Debits to close. 2. Date. 4. Credit to Income Summary. 3. 3.

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Lesson 16 2

LESSON 16-2

Recording Closing Entries for Income Statement Accounts


The income summary account
THE INCOME SUMMARY ACCOUNT

page 487

LESSON 16-2


Closing entry for accounts with credit balances

3

3

CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCES

page 488

1

2

4

1. Heading

3. Debits to close

2. Date

4. Credit to Income Summary

LESSON 16-2


Closing entry for income statement accounts with debit balances

3

3

CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES

page 489

1. Date

2. Account debited

3. Credits to close

4. Debit amount

1

2

4

LESSON 16-2


Summary of closing entry for income statement accounts with debit balances

Purchases

Bal. 209,960.00 Closing 209,960.00

(New Bal. zero)

Income Summary

Adj. (mdse. inv.) 15,840.00 Closing (credit amounts) 500,253.10

Closing (debit accounts) 404,099.15 (New Bal. 80,313.95)

SUMMARY OF CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES

page 490

LESSON 16-2


Closing entry to record net income
CLOSING ENTRY TO RECORD NET INCOME

page 491

1

2

3

1. Date

2. Debit Income Summary

3. Credit Retained Earnings

LESSON 16-2


Closing entry for dividends
CLOSING ENTRY FOR DIVIDENDS

page 491

1

2

3

1. Date

2. Debit Retained Earnings

3. Credit Dividends

LESSON 16-2



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