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Adjusting and Closing Entries in Accounting: A Comprehensive Guide

This lesson explores crucial accounting practices, including the adjusting entries for supplies and prepaid insurance. Learn how to efficiently record closing entries for income statement accounts, whether they carry debit or credit balances, and understand the importance of closing the owner's drawing account. The lesson also highlights the preparation of a post-closing trial balance to ensure accuracy in financial statements. These steps are essential for maintaining a well-organized accounting cycle for service businesses.

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Adjusting and Closing Entries in Accounting: A Comprehensive Guide

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  1. LESSON 8-1 Recording Adjusting Entries

  2. ADJUSTING ENTRY FOR SUPPLIES page 202 LESSON 8-1

  3. ADJUSTING ENTRY FOR PREPAID INSURANCE page 204 LESSON 8-1

  4. LESSON 8-2 Recording Closing Entries

  5. 5 NEED FOR THE INCOME SUMMARY ACCOUNT page 207 LESSON 8-2

  6. 6 CLOSING ENTRY FOR AN INCOME STATEMENT ACCOUNT WITH A CREDIT BALANCE (Debit to close) page 208 LESSON 8-2

  7. 7 CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES (Credit to close) page 209 LESSON 8-2

  8. 8 CLOSING ENTRY TO RECORD NET INCOME OR LOSS AND CLOSE THE INCOME SUMMARY ACCOUNT (Capital: credit torecord net income) (Income Summary:debit to close) page 210 LESSON 8-2

  9. 9 CLOSING ENTRY FOR THE OWNER’S DRAWING ACCOUNT (Credit to close) page 211 LESSON 8-2

  10. LESSON 8-3 Preparing a Post-Closing Trial Balance

  11. 11 GENERAL LEDGER ACCOUNTS AFTER ADJUSTING AND CLOSING ENTRIES ARE POSTED page 213 When an account has a zero balance, lines are drawn in both the Balance DEBIT and Balance CREDIT columns. LESSON 8-3

  12. 12 POST-CLOSING TRIAL BALANCE page 216 LESSON 8-3

  13. 13 ACCOUNTING CYCLE FOR A SERVICE BUSINESS page 217 1. Analyzes transactions 1 2. Journalize 2 3. Post 8 4. Prepare work sheet 5. Prepare financial statements 3 6. Journalize adjusting and closing entries 7 4 7. Post adjusting and closing entries 8. Prepare post-closing trial balance 6 5 LESSON 8-3

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