Question

On the basis of the following data taken from adjusted trial balance columns of the worksheet for the year ended december 31 for painting the perfect picture journalize the four closing entries in the proper order and prepare the post-closing trial balance

Answer 1

The closing entries are journal entries made at the end of an accounting period to transfer the balances of temporary accounts (revenue, expense, and dividend accounts) to the permanent Retained Earnings account. The four closing entries are: Debit revenue accounts and credit Income Summary, Debit Income Summary and credit expense accounts, Debit Income Summary and credit Retained Earnings, and Debit Retained Earnings and credit Dividends.

Step-by-step explanation:

The closing entries are journal entries made at the end of an accounting period to transfer the balances of temporary accounts (revenue, expense, and dividend accounts) to the permanent Retained Earnings account. The four closing entries are:

1. Debit revenue accounts and credit Income Summary.
2. Debit Income Summary and credit expense accounts.
3. Debit Income Summary and credit Retained Earnings.
4. Debit Retained Earnings and credit Dividends.

After the closing entries have been made, a post-closing trial balance is prepared to verify that the accounts are in balance. This trial balance contains only the permanent account balances.