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LALL POA LESSONS

Closing off Ledger Accounts in preparation of the Trading, Profit and Loss (Income) Statement

 It must be remembered that we would have balanced each Ledger account (i.e. balance
c/d and balance b/d) and these balances were used to create the Trial Balance.
 The balances from the Trail Balance is used to create the Income Statement.
 However, ALL Ledger Accounts that will be used in the creation of the Income
Statement has to be closed off.

Accounts used in the Income Statement:

(i) Sales
(ii) Returns Inwards
(iii) Inventory
(iv) Purchases Trading Account
(v) Returns Outwards
(vi) Carriage Inwards
(vii) Revenues
(viii) Expenses Profit and Loss Account

DR Sales CR
Date Details Folio $ Date Details Folio $
2021 2021
31-Dec Trading A/C 2000 31-Dec Balance b/d 2000

DR Purchases CR
Date Details Folio $ Date Details Folio $
2021 2021
31-Dec Balance b/d 1500 31-Dec Trading A/C 1500

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 R. LALL POA LESSONS

DR Returns Inwards CR
Date Details Folio $ Date Details Folio $
2021 2021
31-Dec Balance b/d 200 31-Dec Trading A/C 200

DR Returns Outwards CR
Date Details Folio $ Date Details Folio $
2021 2021
31-Dec Trading A/C 400 31-Dec Balance b/d 400

DR Carriage Inwards CR
Date Details Folio $ Date Details Folio $
2021 2021
31-Dec Balance b/d 150 31-Dec Trading A/C 150

DR Expenses CR
Date Details Folio $ Date Details Folio $
2021 2021
31-Dec Balance b/d 3000 31-Dec Profit and Loss A/C 3000

DR Revenues CR
Date Details Folio $ Date Details Folio $
2021 2021
31-Dec Profit and Loss A/C 1800 31-Dec Balance b/d 1800

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R. LALL POA LESSONS

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