End-year adjustments - Closing the books
4 important questions on End-year adjustments - Closing the books
Closing the Books Closing entries:
2. Establish a zero balance in each of the temporary accounts to start the next accounting period
Closing the books
The following accounts are called temporary or nominal accounts and are closed at the end of the period . .
• Expenses.
• Gains.
• Losses.
• Dividends declared.
Closing the Books
Permanent, or real accounts, and are never closed.
3
- Assets.
- Liabilities.
- Stockholders’ Equity.
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Closing the Books Two steps are used in the closing process . . .
2. Close expenses and losses to Retained Earnings.
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