Closing Journal Entries

Revenues:
Transaction Description Journal Entry Account Title Debit Credit

Service Revenue XXX Income Summary XXX Revenues will be debited for the total dollar amount in the account at the end of the fiscal period. To record the closing of revenues

Expenses:
Transaction Description Journal Entry Account Title Debit Credit

Income Summary XXX Salaries Expense XXX Cost of Goods Sold XXX Rent Expense XXX To record the closing of expenses Supplies Expense XXX Repair Expense XXX Depreciation Expense XXX Utilities Expense XXX Each expense account will be credited for the total dollar amount in the account at the end of the fiscal period. The Income summary account will be debited for the total sum of all expense. Expense accounts should be listed highest to lowest in dollar amount.

Retained Earnings:
Transaction Description Journal Entry Account Title Debit Credit

To close a net income into retained earnings

Income Summary Retained Earnings

XXX XXX

Retained Earnings XXX To close a net loss into retained earnings Income Summary XXX The closing entries for revenues and expenses must be posted to the ledger accounts and a balance must be drawn before this journal entry can be made. If the balance in income summary is a credit then use the net income journal entry. If the balance in income summary is a debit then use the net loss journal entry.

Dividends:
Transaction Description Journal Entry Account Title Debit Credit

To close dividends account

Retained Earnings Dividends

XXX XXX

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