A step at the end of the accounting period that prepares accounts for recording the transactions of the next period.
Closing Entries for Revenue Accounts
• Revenue accounts all have credit balances.
Closing entries for Expense Accounts
• expense accounts have debit balances.
Closing the Income Summary Account
• the balance, after the revenue and expense accounts
have been closed into income summary is closed into capital.
Closing the Owner's Drawing Account
• the drawing account is closed directly into