CENTURY 21 ACCOUNTING © Thomson/South-Western

LESSON 16-2LESSON 16-2

Recording Closing Entries for Income Statement Accounts

CENTURY 21 ACCOUNTING © Thomson/South-Western

2

LESSON 16-2

THE INCOME SUMMARY ACCOUNTTHE INCOME SUMMARY ACCOUNT page 487

CENTURY 21 ACCOUNTING © Thomson/South-Western

3

LESSON 16-2

CLOSING ENTRY FOR ACCOUNTS WITH CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCESCREDIT BALANCES

1122

page 488

3. Debits to close

44

1. Heading

2. Date 4. Credit to Income Summary

3333

CENTURY 21 ACCOUNTING © Thomson/South-Western

4

LESSON 16-2

CLOSING ENTRY FOR INCOME STATEMENT CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCESACCOUNTS WITH DEBIT BALANCES

1122 44

page 489

3. Credits to close

1. Date

2. Account debited

4. Debit amount

33

33

CENTURY 21 ACCOUNTING © Thomson/South-Western

5

LESSON 16-2

SUMMARY OF CLOSING ENTRY FOR SUMMARY OF CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCESDEBIT BALANCES page 490

Bal. 209,960.00 Closing 209,960.00

(New Bal. zero)

Purchases

Adj. (mdse. inv.) 15,840.00 Closing (credit amounts) 500,253.10

Closing (debit accounts) 404,099.15 (New Bal. 80,313.95)

Income Summary

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6

LESSON 16-2

CLOSING ENTRY TO RECORD NET CLOSING ENTRY TO RECORD NET INCOMEINCOME page 491

1122

33

3. Credit Retained Earnings

1. Date

2. Debit Income Summary

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LESSON 16-2

CLOSING ENTRY FOR DIVIDENDSCLOSING ENTRY FOR DIVIDENDS page 491

3. Credit Dividends

1. Date

2. Debit Retained Earnings

1122

33

CENTURY 21 ACCOUNTING © Thomson/South-Western

8

LESSON 16-2

COMPLETED CLOSING ENTRIES FOR A COMPLETED CLOSING ENTRIES FOR A CORPORATION RECORDED IN A JOURNALCORPORATION RECORDED IN A JOURNAL page 492