Respuesta :
Answer:
1. Close revenue accounts:
Dr Service revenue $52, 000
Cr Income Summary $52, 000
2. Close expense accounts:
Dr Income Summary $35, 000
Cr Salaries and Wages Expense $27, 000
Cr Supplies Expense $8, 000
3. Close net income/ (loss):
Dr Income Summary $17, 000
Cr Retained Earnings $17, 000
$52, 000 - $35, 000 = $17, 000
4. Close Dividends/ Drawings
Dr Retained Earnings $2, 000
Cr Dividends $2, 000
Explanation:
The Importance of posting closing journal entries:
Before we go into the importance of posting closing journal entries, it is important that we understand what closing journal entries are. Closing journal entries are journal entries that are made at the end of the accounting period or financial year, which transfer the balances of temporary accounts to permanent accounts. Temporary accounts include income, expense, a=revenue and gains accounts. These closing journal entries are based on adjustments that are made to the trial balance at the end of the accounting period.
The importance of posting closing journal entries is because when we post closing journal entries, we are able to set new intentions for the next journal entry. These journal entries are necessary as we have to set temporary accounts to zero on the general journal.
There are 4 basic closing journal entries:
(a) Close the revenue accounts
(b) Close the expense accounts
(c) Close the income summary account
(d) Close the dividends/ drawings accounts
The following are the closing journal entries that Rios Company has to post at the end of the accounting period:
1. Close revenue accounts:
Dr Service revenue $52, 000
Cr Income Summary $52, 000
2. Close expense accounts:
Dr Income Summary $35, 000
Cr Salaries and Wages Expense $27, 000
Cr Supplies Expense $8, 000
3. Close net income/ (loss):
Dr Income Summary $17, 000
Cr Retained Earnings $17, 000
$52, 000 - $35, 000 = $17, 000
4. Close Dividends/ Drawings
Dr Retained Earnings $2, 000
Cr Dividends $2, 000
