Accounting Bellwork

1
Chapter 10

Accounting Bellwork
3rd Hour How is the Income Summary account
different from other temporary capital accounts?



2
Chapter 10

Accounting Bellwork

1. It is used only at the end of the fiscal year to
   summarize the balances from the revenue and
   expense accounts.
2. It does not have a normal balance, which means
   that it does not have an increase or a decrease
   side.

3
Plans for today

• Grade Homework
• Begin Ch10-2
• Assignment

4
Chapter 10

Section 2 Posting Closing Entries and Preparing a
Post-Closing Trial Balance

• What Youll Learn
• How to record closing entries in the general
  ledger. The purpose of the Income Summary
  account.
• The purpose of a post-closing trial balance.
• How to prepare a post-closing trial balance.

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Section 2 Posting Closing Entries and Preparing a
Post-Closing Trial Balance (cont.)
Chapter 10

Why Its Important A post-closing trial balance
verifies that the closing entries are properly
recorded in the general ledger and that you are
ready to start the next accounting period.

• Key Term
• post-closing trial balance

6
Section 2 Posting Closing Entries and Preparing a
Post-Closing Trial Balance (cont.)
Chapter 10

Completing the Eighth Step in the Accounting
Cycle Posting Closing Entries to the General
Ledger

Only difference is that you write the word
closing in the description column.


7
Section 2 Posting Closing Entries and Preparing a
Post-Closing Trial Balance (cont.)
Chapter 10

The Ninth Step in the Accounting Cycle Preparing
a Post-Closing Trial Balance

• Prepared to make sure total debits equal total
  credits after the closing entries are posted.
• Only accounts with balances are listed (permanent
  accounts).

8
Demonstration Problem

• 10-6

9
permanent
Temporary
10
Specific date.
Allisons Repair Shop
Post-Closing Trial Balance
December 31, 200-
13255.--
101 Cash In Bank
123.--
105 Accounts Receivable-C. Smythe
900.--
110 Accounts Receivable-Bell Sons
3100.--
115 Computer Equipment
5500.--
120 Repair Equipment
800.--
201 Accounts Payable -Midtown Computers
395.--
205 Accounts Payable Nagle Supplies
21683.--
301 A. Degaro, Capital
22878.--
Total
22878.--
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Section 2 Posting Closing Entries and Preparing a
Post-Closing Trial Balance (cont.)
Chapter 10

Check Your Understanding p.246.

• Thinking Critically 1 2
• Problem 10-3 and 10-4
• p248, Understanding Accounting Concepts and
  Procedures 1-14.
• Audit with Alex