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What is the purpose of closing entries?
The purpose of closing entries is to transfer the balances of temporary accounts to permanent accounts. These entries are used via the adjusted trial balances.
What two purposes are accomplished by recording closing entries?
1.Prepares the accounts affected by closing entries by giving them a balance of 0. 2. to update the owners capital account for the previous period
Which accounts are closed in the closing entries?
Closing entries close out your temporary or "income statement" accounts, as well as your dividends paid account. All of your revenue accounts increase your retained earnings, expense accounts decrease retained earnings, and dividends paid decrease retained earnings.
What comes first closing journal entries or post closing entries?
Closing entries comes first as name shows post closing entries are after closing entries and it is as simple as name suggests.
Is closing entries normally entered in the general journal and then posted to the work sheet?
Closing entries are normally entered in the general journal to zero temporary and nominal accounts. They do not need to be posted to the worksheet.
