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About this document
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- 1 page
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- $1 one-time, yours to keep
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- Format
- Subject
- Accounting
- Module
- Week 3
This document explains the four closing journal entries in accounting, why they are necessary, and how they are used. It also covers reversing entries, their pros and cons, and why they are optional. It is for Week 3.
What's inside
- Four closing journal entries
- Permanent and temporary accounts
- Post-closing trial balance
- Reversing entries
- Pros and cons of reversing entries
Who it is for: Students taking an accounting course. (Undergraduate)
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Summary
Accounting students learn about the four closing journal entries. They see why these entries are important and how they affect the accounts.
Temporary and permanent accounts
Temporary accounts are those that are closed at the end of the accounting period. Permanent accounts are carried forward to the next period. This section explains why this matters.
The four closing entries
The four closing journal entries are listed. Each entry is explained. The post-closing trial balance is described.
Reversing entries
Reversing entries are defined. Their purpose and use are explained. The pros and cons of using reversing entries are discussed.
Key terms
- Closing journal entries
- Journal entries made at the end of an accounting period to close temporary accounts.
- Post-closing trial balance
- A list of all permanent accounts and their closing balances after the closing entries.
- Reversing entries
- Journal entries made at the beginning of an accounting period to offset the previous adjusting entry.
- Temporary accounts
- Accounts that are closed at the end of the accounting period.
- Permanent accounts
- Accounts that are carried forward to the next accounting period.
- Accrual based adjusting entries
- Adjusting entries that are made to record revenues or expenses that have been earned or incurred but not yet recorded.
Questions this document helps with
- What are the four closing journal entries?
- Why are closing journal entries necessary?
- What is a reversing entry?
Summary written with AI from the document's text.
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