Topic 4 A191

Example Exercise
TOPIC
Completing the Accounting Cycle
4
Accounting
5e
Learning Objectives
• LO1: Describe the nature of the adjusting process.

• LO2: Journalize entries for accounts requiring adjustment.
• LO3: Summarize the adjustment process.
• LO4: Prepare an adjusted trial balance.
• LO5: Describe the flow of accounting information from the unadjusted trial
balance into the adjusted trial balance and financial statements.
• LO6: Prepare financial statements from adjusted account balances.
• LO7: Prepare closing entries.
• LO8: Describe the accounting cycle.
• LO9: Illustrate the accounting cycle for one period.
• LO10: Explain what is meant by the fiscal year and the natural business
year.
©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Accounting Cycle
Closing
Entries Source
Financial Documents
Statements
Adjusted Journal
Trial Balance
Trial Balance Ledger 3

Adjustments
Fiscal year Calendar year
1st day of a month and

ends twelve months later • 1st January to 31st
on the last day of a December 2013
month.
E.g: 1st June 2012 to

31st May 2013
4
Nature of the Adjusting Process
(slide 1 of 2)
• The accounting period concept requires that

revenues and expenses be reported in the proper
period.
• Under the accrual basis of accounting, revenues are
reported on the statement of profit or loss and other
comprehensive income in the period in which they
are earned.
o For example, revenue is reported when the services are
provided to customers.
o Cash may or may not be received from customers during
this period.
• The accounting concept supporting this reporting of
revenues is called the revenue recognition concept.
Nature of the Adjusting Process
(slide 2 of 2)
• Under accrual accounting, revenues are recognized when

services have been performed or products have been delivered
to customers. Revenue is measured as assets received, such as
cash or accounts receivable, in exchange for a service or
product. This process of recording revenues is called revenue
recognition.
• The accounting concept supporting reporting revenues and
related expenses in the same period is called the matching
concept.
• Under the cash basis of accounting, revenues and expenses
are reported on the statement of profit or loss and other
comprehensive income in the period in which cash is received
or paid.
The Adjusting Process
(slide 1 of 2)
• Under the accrual basis, some of the accounts need

updating at the end of the accounting period for the
following reasons:
o Some expenses are not recorded daily.

o Some revenues and expenses are incurred as time passes
rather than as separate transactions.
o Some revenues and expenses may be unrecorded.
The Adjusting Process
(slide 2 of 2)
• The analysis and updating of accounts at the end of

the period before the financial statements are
prepared is called the adjusting process.
• The journal entries that bring the accounts up to date

at the end of the accounting period are called
adjusting entries.
Example Exercise Accounts Requiring Adjustment
Indicate with a Yes or No whether or not each of the

following accounts normally requires an adjusting
entry:
a. Cash-No
b. Prepaid Rent-Yes
c. Wages Expense-Yes
d. Land-No
e. Accounts Receivable-Yes
f. Unearned Rent-Yes
©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in
part.
Types of Accounts Requiring Adjustment
• The following basic types of accounts require

adjusting entries:
o Prepaid expenses
o Unearned revenues
o Accrued revenues
o Accrued expenses
Prepaid Expenses
(slide 1 of 2), Part 1
• Prepaid expenses are the advance payment of future expenses and are
recorded as assets when cash is paid.
Prepaid Expenses
Unearned Revenues
(slide 1 of 2)
• Unearned revenues are the advance receipt of future revenues and are
recorded as liabilities when cash is received.
Unearned Revenues
(slide 2 of 2)
Accrued Revenues
(slide 1 of 2)
• Accrued revenues are unrecorded revenues that have

been earned and for which cash has yet to be
received.
Accrued Revenues
(slide 2 of 2)
Accrued Expenses
• Accrued expenses are unrecorded expenses that have

been incurred and for which cash has yet to be paid.
Accrued Expenses
Example Exercise Type of Adjustment
Classify the following items as (1) prepaid expense, (2)

unearned revenue, (3) accrued expense, or (4) accrued
revenue:
a. Wages owed but not yet paid. a. Accrued expense
b. Supplies on hand. b. Prepaid expense
c. Fees received but not yet earned. c. Accrued revenue
d. Fees earned but not yet received. d. Unearned
revenue
part.
Unadjusted Trial Balance for NetSolutions
Expanded Chart of Accounts for NetSolutions
Prepaid Expenses
• NetSolutions’ supplies account has a balance of

RM2,000 on the unadjusted trial balance. Some of
these supplies have been used. Assuming that on
December 31 the amount of supplies on hand is
RM760, the amount to be transferred from the asset
account to the expense account is computed as
follows:
Prepaid Expenses
Prepaid Insurance
• The debit balance of RM2,400 in NetSolutions’

prepaid insurance account represents the December 1
prepayment of insurance for 12 months.
Impact of Omitting Adjusting Entries
for Prepaid Expenses
• Arrow (1) indicates the effect of the understated expenses on

assets.
• Arrow (2) indicates the effect of the overstated net income on
owner’s equity.
Example Exercise Adjustment for Prepaid Expense
The prepaid insurance account had a beginning balance

of RM6,400 and was debited for RM3,600 of premiums
paid during the year. Journalize the adjusting entry
required at the end of the year, assuming the amount
of unexpired insurance related to future periods is
RM3,250.
part.
Unearned Revenues
• The credit balance of RM360 in NetSolutions’ unearned rent account represents the
receipt of three months’ rent on December 1 for December, January, and February.
At the end of December, one month’s rent has been earned.
Impact of Omitting Adjusting Entry
for Unearned Revenues
Example Exercise Adjustment for Unearned Revenue
The balance in the unearned fees account, before

adjustment at the end of the year, is RM44,900.
Journalize the adjusting entry required if the amount of
unearned fees at the end of the year is RM22,300.
part.
Accrued Revenues
• NetSolutions signed an agreement with Damar Co. on December 15 to provide

services at a rate of RM20 per hour. As of December 31, NetSolutions had provided
25 hours of services. The revenue will be billed on January 15.
for Accrued Revenues
Example Exercise Adjustment for Accrued Revenues
At the end of the current year, RM13,680 of fees have

been earned but have not been billed to clients.
Journalize the adjusting entry to record the accrued
fees.
part.
Accrued Wages
part.
Accrued Expenses
• NetSolutions pays it employees biweekly. During December, NetSolutions paid

wages of RM950 on December 13 and RM1,200 on December 27. As of December
31, NetSolutions owes RM250 of wages to employees for Monday and Tuesday,
December 30 and 31.
Accrued Expenses
• NetSolutions paid wages of RM1,275 on January 10.

This payment includes the RM250 of accrued wages
recorded on December 31.
for Accrued Expenses
Example Exercise Adjustment for Accrued Expense
Suria Realty Co. pays weekly salaries of RM12,500 on

Friday for a five-day week ending on that day.
Journalize the necessary adjusting entry at the end of
the accounting period, assuming that the period ends
on Thursday.
part.
Depreciation Expense
(slide 1 of 5)
• Fixed assets, or plant assets, are physical resources

that are owned and used by a business and are
permanent or have a long life.
• As time passes, a fixed asset loses its ability to
provide useful services. This decrease in usefulness is
called depreciation.
• All fixed assets, except land, lose their usefulness
and, thus, are said to depreciate.
• As a fixed asset depreciates, a portion of its cost
should be recorded as an expense. This periodic
expense is called depreciation expense.
part.
(slide 2 of 5)
• The fixed asset account is not decreased (credited)

when making the related adjusting entry. This is
because both the original cost of a fixed asset and the
depreciation recorded since its purchase are reported
on the statement of financial position. Instead, an
account entitled Accumulated Depreciation is
increased (credited).
• Accumulated depreciation accounts are called contra

accounts, or contra asset accounts.
(slide 3 of 5)
• Normal titles for fixed asset accounts and their related

contra asset accounts are as follows:
(slide 4 of 5)
• NetSolutions estimates the depreciation on its office

equipment to be RM50 for the month of December.
(slide 5 of 5)
• The difference between the original cost of the office

equipment and the balance in the accumulated
depreciation—office equipment account is called the
book value of the asset (or net book value).
• It is computed as follows:
Book Value of Asset = Cost of the Asset – Accumulated Depreciation of
Asset
for Depreciation
Example Exercise Adjustment for Depreciation
The estimated amount of depreciation on equipment

for the current year is RM4,250. Journalize the
adjusting entry to record the depreciation.
part.
Summary of Adjustments
(slide 1 of 3)
(slide 2 of 3)
(slide 3 of 3)
Adjusting Entries—NetSolutions
Ledger with Adjusting Entries—NetSolutions
(slide 1 of 5)
(slide 2 of 5)
(slide 3 of 5)
(slide 4 of 5)
(slide 5 of 5)
Example Exercise Effect of Omitting Adjustments
For the year ending December 31, 2016, Mann Medical

Co. mistakenly omitted adjusting entries for (1)
RM8,600 of unearned revenue that was earned, (2)
earned revenue of RM12,500 that was not billed, and
(3) accrued wages of RM2,900. Indicate the combined
effect of the errors on (a) revenues, (b) expenses, and
(c) net income for the year ended December 31, 2016.
part.
Adjusted Trial Balance, Part 1
• The purpose of the adjusted trial balance is to verify

the equality of the total debit and credit balances
before the financial statements are prepared.
part.
Adjusted Trial Balance, Part 2
Example Exercise Effect of Errors on
Adjusted Trial Balance
For each of the following errors, considered individually, indicate

whether the error would cause the adjusted trial balance totals
to be unequal. If the error would cause the adjusted trial balance
totals to be unequal, indicate whether the debit or credit total is
higher and by how much.
a. The adjustment for accrued fees of RM5,340 was journalized
as a debit to Accounts Payable for RM5,340 and a credit to
Fees Earned of RM5,340.
b. The adjustment for depreciation of RM3,260 was journalized
as a debit to Depreciation Expense for RM3,620 and a credit
to Accumulated Depreciation for RM3,260
part.
End-of-Period Spreadsheet and Flow of
Accounting Data, NetSolutions
Flow of Accounting Information (slide 1 of 5)
• Account balances are listed in the Unadjusted Trial

Balance columns using the ending balances found in
the general ledger.
• Adjustments are entered here. Two possibilities:

o Deferrals – Existing balances are changed.
o Accruals – New information is entered.
• Adjustments are added to or subtracted from the

amounts in the Unadjusted Trial Balance columns.
Account balances are now adjusted.
• Amounts for revenues and expenses in the Adjusted Trial

Balance columns are extended to the Statement of Profit or
Loss and Other Comprehensive Income (Income Statement)
columns.
• The amounts for assets, liabilities, owner’s capital, and

drawing in the Adjusted Trial Balance columns are extended to
the Statement of Financial Position (Balance Sheet) columns.
Example Exercise Flow of Accounts into Financial
Statements
The balances for the accounts that follow appear in the Adjusted Trial Balance
columns of the end-of-period spreadsheet. Indicate whether each account
would flow into the Statement of Profit or Loss and Other Comprehensive
Income, Statement of Changes in Equity, or Statement of Financial Position.
1. Office Equipment 1. Statement of Financial Position

2. Utilities Expense 2. Statement of Profit or Loss and
3. Accumulated Depreciation— Other Comprehensive Income
Equipment 3. Statement of Financial Position
4. Unearned Rent 4. Statement of Financial Position
5. Fees Earned 5. Statement of Profit or Loss and
6. Doug Johnson, Drawing Other Comprehensive Income
6. Statement of Changes in Equity
7. Rent Revenue
8. Supplies 7. Statement of Profit or Loss and
Other Comprehensive Income
8. Statement of Financial Position
part.
Statement of Profit or Loss and Other
Comprehensive Income
• The Statement of Profit or Loss and Other

Comprehensive Income is prepared directly from the
Statement of Profit or Loss and Other Comprehensive
Income or Adjusted Trial Balance columns of the
end-of-period spreadsheet (work sheet), beginning
with fees earned of RM16,840.
• The expenses in the Statement of Profit or Loss and
Other Comprehensive Income are listed in order of
size, beginning with the larger items. However,
Miscellaneous Expense is always the last account
listed, regardless of its amount.
Financial Statements, NetSolutions: Statement of
Profit or Loss and Other Comprehensive Income
Statement of Changes in Equity
• The first item presented on the Statement of Changes

in Equity is the balance of the owner’s capital account
at the beginning of the period.
• Any investments, the net income (or net loss), and the
drawing account balance are used to determine the
ending owner’s capital account balance.
Changes in Equity
Example Exercise Statement of Changes in Equity Exercise
En. Zack owns and operates Zack Employment Services. On

January 1, 2017, En. Zack capital had a balance of RM186,000.
During the year, En. Zack invested an additional RM40,000 and
withdrew RM25,000. For the year ended December 31, 2017,
Zack Employment Services reported a net income of RM18,750.
Prepare a Statement of Changes in Equity for the year ended
December 31, 2017.
part.
Statement of Financial Position
• The Statement of Financial Position is prepared directly from

the Statement of Financial Position or Adjusted Trial Balance
columns of the end-of-period spreadsheet, beginning with Cash
of RM2,065.
• A classified Statement of Financial Position is a Statement of
Financial Position that is expanded by adding subsections for
assets and liabilities.
o Assets are commonly divided into two sections on the Statement of
Financial Position: (1) current assets and (2) property, plant, and
equipment.
o Liabilities are commonly divided into two sections on the Statement of
Financial Position: (1) current liabilities and (2) long-term liabilities.
Financial Position
Current Assets (slide 1 of 2)
• Cash and other assets that are expected to be

converted into cash or sold or used up usually within
one year or less, through the normal operations of the
business, are called current assets.
o Cash
o Accounts receivable
o Notes receivable
o Supplies
o Other prepaid expenses
Current Assets (slide 2 of 2)
• Notes receivable are written promises by the

customer to pay the amount of the note and interest.
Like accounts receivable, notes receivable are
amounts that customers owe, but they are more
formal than accounts receivable.
• Notes receivable and accounts receivable are current

assets because they are usually converted to cash
within one year or less.
Property, Plant, and Equipment
• Property, plant, and equipment (also called fixed

assets or plant assets) include land and assets that
depreciate over a period of time.
o Equipment
o Machinery
o Buildings
Current Liabilities
• Amounts the business owes to creditors that will be

due within a short time (usually one year or less) and
that are to be paid out of current assets are called
current liabilities.
o Accounts payable
o Notes payable
o Wages payable
o Interest payable
o Unearned fees
Long-Term Liabilities
• Amounts the business owes to creditors that will not

be due for a long time (usually more than one year)
are called long-term liabilities.
Owner’s Equity
• Owner’s equity is the owner’s right to the assets of

the business.
• Owner’s equity is added to the total liabilities, and
this combined total must be equal to the total assets.
• It is presented on the Statement of Financial Position
below the liabilities section.
Example Exercise Classified Statement of Financial
Position
The following accounts appear in an adjusted trial balance of Hindsight

Consulting. Indicate whether each account would be reported in the (a)
current asset; (b) property, plant, and equipment; (c) current liability; (d)
long-term liability; or (e) owner’s equity section of the December 31, 2017,
Statement of Financial Position of Hindsight Consulting.
1. En. Tan, Capital 1. Owner’s equity

2. Notes Receivable (due in six 2. Current asset
months) 3. Long-term liability
3. Notes Payable (due in 10 years) 4. Property, plant, and equipment
4. Land 5. Current asset
5. Cash 6. Current liability
6. Unearned Rent (three months) 7. Property, plant, and equipment
7. Accumulated Depreciation— 8. Current liability
Equipment
8. Accounts Payable
part.
Permanent Accounts
• Accounts that are relatively permanent from year to

year are called permanent accounts or real
accounts.
• The balances of these accounts are carried forward
from year to year.
• This includes accounts reported on the Statement of
Financial Position.
Temporary Accounts
• Accounts that report amounts for only one period are

called temporary accounts or nominal accounts.
• Temporary accounts are not carried forward because
they relate to only one period.
• This includes all accounts reported on the Statement
of Profit or Loss and Other Comprehensive Income as
well as the owner’s drawing account, which is
reported on the Statement of Changes in Equity.
The Closing Process
Closing Entries (slide 1 of 3)
• To report amounts for only one period, temporary

accounts should have zero balances at the beginning
of the next period.
• To achieve this, temporary account balances are
transferred to permanent accounts at the end of the
accounting period through journal entries.
• The entries that transfer these balances are called
closing entries. The transfer process is called the
closing process (or closing the books).
• After the closing entries are posted, all of the
temporary accounts have zero balances.
• Income Summary is a temporary account that is only used

during the closing process.
• At the beginning of the closing process, Income Summary has
no balance.
• During the closing process, revenue and expense accounts are
cleared by debiting or crediting Income Summary for their
amounts. Because it has the effect of clearing the revenue and
expense accounts of their balances, Income Summary is
sometimes called a clearing account.
• The balance of Income Summary (net income or net loss) is
transferred to the owner’s capital account.
• At the end of the closing process, the Income Summary
account will have a zero balance.
• The four closing entries required in the closing process are as

follows:
1. Debit each revenue account for its balance and credit
Income Summary for the total revenue.
2. Credit each expense account for its balance and debit
Income Summary for the total expenses.
3. Debit Income Summary for its balance and credit the
owner’s capital account (in the case of net income).
Alternatively, credit Income Summary and the debit
owner’s capital account (in the case of a net loss).
4. Debit the owner’s capital account for the balance of the
drawing account and credit the drawing account.
Flowchart of Closing Entries for NetSolutions
Closing Entries, NetSolutions
Ledger, NetSolutions (slide 1 of 5)
Example Exercise Closing Entries (slide 1 of 2)
After the accounts have been adjusted at July 31, the

end of the fiscal year, the following balances are taken
from the ledger of Cabriolet Services Co.:
Journalize the four entries required to close the

accounts.
part.
Example Exercise Closing Entries (slide 2 of 2)
Post-Closing Trial Balance
• A post-closing trial balance is prepared after the

closing entries have been posted. The purpose of the
post-closing (after closing) trial balance is to verify
that the ledger is in balance at the beginning of the
next period.
Post-Closing Trial Balance, NetSolutions
Accounting Cycle (slide 1 of 4)
• The accounting process that begins with analyzing

and journalizing transactions and ends with the post-
closing trial balance is called the accounting cycle.
• The steps in the accounting cycle are as follows:

o Step 1: Transactions are analyzed and recorded in the journal.
o Step 2: Transactions are posted to the ledger.
o Step 3: An unadjusted trial balance is prepared.
o Step 4: Adjustment data are assembled and analyzed.
o Step 5: An optional end-of-period spreadsheet (work sheet) is prepared.
o Step 6: Adjusting entries are journalized and posted to the ledger.
o Step 7: An adjusted trial balance is prepared.
o Step 8: Financial statements are prepared.
o Step 9: Closing entries are journalized and posted to the ledger.
o Step 10: A post-closing trial balance is prepared.
Example Exercise Accounting Cycle (slide 3 of 4)
From the following list of steps in the accounting cycle,

identify what two steps are missing:
a. Transactions are analyzed and recorded in the journal.
b. Transactions are posted to the ledger.
c. Adjustment data are assembled and analyzed.
d. An optional end-of-period spreadsheet is prepared.
e. Adjusting entries are journalized and posted to the ledger.
f. Financial statements are prepared.
g. Closing entries are journalized and posted to the ledger.
h. A post-closing trial balance is prepared.
part.
Illustration of the Accounting Cycle
• The following slides will provide an illustration of the

accounting cycle for Sufia Consulting.
o Chart of Accounts
o Journal Entries
o Unadjusted Trial Balance
o End-of-Period Spreadsheet
o Adjusting Entries
o Adjusted Trial Balance
o Financial Statements
o Closing Entries
o Post-Closing Trial Balance
o Ledger
Chart of Accounts for Sufia Consulting
Journal Entries for April, Sufia Consulting (slide 1 of
3)
3)
3)
Unadjusted Trial Balance, Sufia Consulting
End-of-Period Spreadsheet, Sufia Consulting
Adjusting Entries, Sufia Consulting
Adjusted Trial Balance, Sufia Consulting
Financial Statements, Sufia Consulting:
Statement of Profit or Loss and Other
Comprehensive Income
Statement of Changes in Equity
Statement of Financial Position
Closing Entries, Sufia Consulting
Post-Closing Trial Balance, Sufia Consulting
Ledger, Sufia Consulting (slide 1 of 4)
Fiscal Year
• The annual accounting period adopted by a business

is known as its fiscal year.
• Fiscal years begin with the first day of the month
selected and end on the last day of the following
twelfth month.
• When a corporation adopts a fiscal year that ends
when business activities have reached the lowest
point in its annual operating cycle, such a fiscal year
is called the natural business year.
Financial History of a Business
Appendix 1: End-of-Period Spreadsheet
• Spreadsheets are usually prepared by using a

computer program such as Microsoft’s Excel®.
• Some accountants prefer to expand the end-of-period

spreadsheet to include financial statement columns.
Appendix 1: Steps in Preparing an Expanded
End-of-Period Spreadsheet
• Step 1: Enter the title.

• Step 2: Enter the unadjusted trial balance.
• Step 3: Enter the adjustments.
• Step 4: Enter the adjusted trial balance.
• Step 5: Extend the accounts to the Statement of Profit
or Loss and Other Comprehensive Income and
Statement of Financial Position columns.
• Step 6: Total the Statement of Profit or Loss and
Other Comprehensive Income and Statement of
Financial Position columns, compute the net income
or net loss, and complete the spreadsheet.
Completed Spreadsheet with Net Income Shown
Appendix 1: Preparing the Financial
Statements from the Spreadsheet
• The spreadsheet can be used to prepare the Statement

of Profit or Loss and Other Comprehensive Income,
the Statement of Changes in Equity, and the
Statement of Financial Position.
• When a spreadsheet is used, the adjusting and closing

entries are normally not journalized or posted until
after the spreadsheet and financial statements have
been prepared.

Topic 4 A191

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Topic 4 A191

Uploaded by

Copyright:

Available Formats

Example Exercise

• LO1: Describe the nature of the adjusting process.

Trial Balance Ledger 3

1st day of a month and

E.g: 1st June 2012 to

• The accounting period concept requires that

• Under accrual accounting, revenues are recognized when

• Under the accrual basis, some of the accounts need

o Some expenses are not recorded daily.

• The analysis and updating of accounts at the end of

• The journal entries that bring the accounts up to date

Indicate with a Yes or No whether or not each of the

• The following basic types of accounts require

• Accrued revenues are unrecorded revenues that have

• Accrued expenses are unrecorded expenses that have

Classify the following items as (1) prepaid expense, (2)

• NetSolutions’ supplies account has a balance of

• The debit balance of RM2,400 in NetSolutions’

• Arrow (1) indicates the effect of the understated expenses on

The prepaid insurance account had a beginning balance

The balance in the unearned fees account, before

• NetSolutions signed an agreement with Damar Co. on December 15 to provide

At the end of the current year, RM13,680 of fees have

• NetSolutions pays it employees biweekly. During December, NetSolutions paid

• NetSolutions paid wages of RM1,275 on January 10.

Suria Realty Co. pays weekly salaries of RM12,500 on

• Fixed assets, or plant assets, are physical resources

• The fixed asset account is not decreased (credited)

• Accumulated depreciation accounts are called contra

• Normal titles for fixed asset accounts and their related

• NetSolutions estimates the depreciation on its office

• The difference between the original cost of the office

The estimated amount of depreciation on equipment

For the year ending December 31, 2016, Mann Medical

• The purpose of the adjusted trial balance is to verify

For each of the following errors, considered individually, indicate

• Account balances are listed in the Unadjusted Trial

• Adjustments are entered here. Two possibilities:

• Adjustments are added to or subtracted from the

• Amounts for revenues and expenses in the Adjusted Trial

• The amounts for assets, liabilities, owner’s capital, and

1. Office Equipment 1. Statement of Financial Position

• The Statement of Profit or Loss and Other

• The first item presented on the Statement of Changes

En. Zack owns and operates Zack Employment Services. On

• The Statement of Financial Position is prepared directly from

• Cash and other assets that are expected to be

• Notes receivable are written promises by the

• Notes receivable and accounts receivable are current

• Property, plant, and equipment (also called fixed

• Amounts the business owes to creditors that will be

• Amounts the business owes to creditors that will not

• Owner’s equity is the owner’s right to the assets of

The following accounts appear in an adjusted trial balance of Hindsight

1. En. Tan, Capital 1. Owner’s equity

• Accounts that are relatively permanent from year to

• Accounts that report amounts for only one period are

• To report amounts for only one period, temporary

• Income Summary is a temporary account that is only used

• The four closing entries required in the closing process are as

After the accounts have been adjusted at July 31, the

Journalize the four entries required to close the

• A post-closing trial balance is prepared after the

• The accounting process that begins with analyzing