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  • Closing Entries Perpetual Inventory System PDF

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    pallavi sengar
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    Under the perpetual inventory system, the following closing entries are required: 1) Temporary accounts with debit balances (expenses and losses) are closed by debiting Profit or Loss Summary and crediting the respective accounts. 2) Temporary accounts with credit balances (revenues and gains) are closed by crediting Profit or Loss Summary and debiting the respective accounts. 3) Profit or Loss Summary is closed by debiting Walter Watsmeadow Capital for the net profit and crediting Profit or Loss Summary. 4) Walter Watsmeadow Drawing is closed by debiting Walter Watsmeadow Capital and crediting Walter Watsmeadow Drawing.

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    Under the perpetual inventory system, the following closing entries are required: 1) Temporary accounts with debit balances (expenses and losses) are closed by debiting Profit or Loss Summary and crediting the respective accounts. 2) Temporary accounts with credit balances (revenues and gains) are closed by crediting Profit or Loss Summary and debiting the respective accounts. 3) Profit or Loss Summary is closed by debiting Walter Watsmeadow Capital for the net profit and crediting Profit or Loss Summary. 4) Walter Watsmeadow Drawing is closed by debiting Walter Watsmeadow Capital and crediting Walter Watsmeadow Drawing.

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    16 views2 pages

    Closing Entries Perpetual Inventory System PDF

    Uploaded by

    pallavi sengar
    Under the perpetual inventory system, the following closing entries are required: 1) Temporary accounts with debit balances (expenses and losses) are closed by debiting Profit or Loss Summary and crediting the respective accounts. 2) Temporary accounts with credit balances (revenues and gains) are closed by crediting Profit or Loss Summary and debiting the respective accounts. 3) Profit or Loss Summary is closed by debiting Walter Watsmeadow Capital for the net profit and crediting Profit or Loss Summary. 4) Walter Watsmeadow Drawing is closed by debiting Walter Watsmeadow Capital and crediting Walter Watsmeadow Drawing.

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    of 2

    Q3.

    Closing entries — perpetual inventory system (5 Marks)

    The trial balance of Westmeadow Weightlifting contains the following account balances at 30
    June 2020.

    Required
    Prepare the closing entries under the perpetual inventory system. (5 Marks)

    Solution 3

    Date Particulars Debit Credit


    $
    30-Jun-20 Profit Or Loss Summery 22,73,921.00
    $
    Cost of Sales 15,28,960.00
    $
    Sales Return & Allowances 43,740.00
    $
    Discount Allowed 7,740.00
    $
    Selling Expenses 3,88,150.00
    $
    Freight Inward 27,480.00
    $
    Administration Expenses 2,33,411.00
    $
    Finanace Expenses 44,440.00
    Close Debit temporary Account

    $
    Sales 23,89,720.00
    $
    Discount Received 5,360.00
    $
    Profit or Loss summery 23,95,080.00
    Close Credit Temporary account

    $
    Profit Or Loss Summery 1,21,159.00
    $
    Walter watsmeadow Capital 1,21,159.00
    Profit transferred

    $
    Walter watsmeadow Capital 93,540.00
    $
    Walter watsmeadow Drawing 93,540.00
    Close Drawing account

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