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08 Closing Entries (Step 8), Part 1
08 Closing Entries (Step 8), Part 1
Temporary accounts
Include all income statement accounts and dividends,
are closed, and start at zero
Permanent accounts
Include all balance sheet accounts, are not closed, are
accounts whose balances are cumulative, and are
carried forward period after period
Journal entries needed to transfer data from temporary
accounts to permanent accounts
Temporary accounts brought down to zero
1. Close revenue
Debit revenue accounts
Credit income summary
2. Close expense
Credit expense accounts
Debit income summary
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10/12/23, 11:46 AM Closing Entries (Step 8), Part 1
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