Question

prepare the first closing entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Answer 1

The student's query is about making the first closing entry in accounting to close temporary accounts and preparing the current account balance by summarizing trade components. This involves debit and credit entries to zero out revenues and calculating trade and income balances.

Step-by-step explanation:

The student's question relates to the process of creating a closing entry in accounting, which is part of the steps to tally a current account balance. The first closing entry typically involves transferring the balances of temporary accounts (revenues, expenses, income summary, and dividends) to permanent accounts (retained earnings).

Steps for Preparing the First Closing Entry:

1. Identify all revenue accounts and sum their balances.
2. Debit each revenue account for its balance to bring it to zero.
3. Credit the income summary account by the total amount of revenues to transfer the balance.

This question also involves understanding the calculation of a current account balance by summarizing exports, imports, income payments, and unilateral transfers. Steps include entering dollar amounts under the correct columns, calculating the merchandise trade balance, and determining the final balance number to represent the current account balance.