Question

Prepare closing entries and post to the t-accounts (on the t-accounts tab).

Answer 1

Closing entries are made at the end of an accounting period to transfer the balances of temporary accounts to the retained earnings or capital account. T-accounts are used to visually represent accounts and track debits and credits.

Step-by-step explanation:

In accounting, closing entries are made at the end of an accounting period to transfer the balances of temporary accounts (revenue, expenses, and dividends) to the retained earnings or capital account. These entries effectively reset the temporary accounts to zero and prepare them for the next accounting period.

To prepare closing entries, you need to:

1. Determine the balances of the revenue, expense, and dividends accounts.
2. Transfer the balances to the retained earnings or capital account.
3. Close the income summary account by transferring its balance to the retained earnings or capital account.
4. Close the dividends account by transferring its balance to the retained earnings or capital account.

Once the closing entries are prepared, they are posted to the T-accounts. T-accounts are a visual representation of accounts used in accounting to track debits and credits. Each account has a T-shaped layout, with the left side representing debits and the right side representing credits.