How do you determine closing entries from income stmt and balance sheet?

Question

I'm taking a class and up until now...it's been easy to follow. Now it wants me to enter the closing entries in the GL, but it doesn't tell me what they are (which it always did in the past). I'm confused!!! Directions said use the income statement and balance sheet to enter closing entries...but how do I do that??? Help please! :)

Answer 1

You posted this twice! Just thought I'd let you know (: (your question is really scaring me by the way lmao) Is Yahoo still playing up? I wasted 20 points trying to post one question today!

And I feel mean, I hope you don't get excited thinking this is a proper answer. You know I'd help if I could! :) I'm sorry!

EDIT - Lmao she really said that?! (Just looked and she did, she's a TC as well, puh! No way can she believe she'll get best answer with that!)

Well I'm really glad you got it sorted, I think we've all been there! :) And off topic, just found a little pile of dog biscuits in my bed, I wonder who that was...??

Lmao! I have yet to find dog biscuits we can both share. Have you ever tried them? :D But take my advice, DONT try cat food...please.

Give them a try, can't be any worse than what us humans put in our mouths every day!

Ok I'm gonna shush now. :D Take care Jen!

Answer 2

There are four closing entries, which transfer all temporary account balances to the owner's capital account.

1.  Close the income statement accounts with credit balances (normally revenue accounts) to a special temporary account named income summary.

2.  Close the income statement accounts with debit balances (normally expense accounts) to the income summary account. After all revenue and expense accounts are closed, the income summary account's balance equals the company's net income or loss for the period.

3.  Close income summary to the owner's capital account or, in corporations, to the retained earnings account. The purpose of the income summary account is simply to keep the permanent owner's capital or retained earnings account uncluttered.

4.  Close the owner's drawing account to the owner's capital account. In corporations, this entry closes any dividend accounts to the retained earnings account.

Pls refer to the link to see how the journal entries are posted.

Answer 3

closing entries are usually entries need to clear out the net income, all revenue, cost of revenue and operating expenses to retained earnings in the balance sheet. At the end of a month or at year-end these entries are needed so the the subsequent period's operating statement will reflect only that periods activity.