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Prepare the general journal entry (without explanation) needed to close Net Income or Net Loss for the year end. Use compound entries where required. If no entry is required then write "No Entry Required."

Respuesta :

Answer:

Closing entry for closing net profit / net loss for the year ended

Explanation:

  • In case of net profit, for the year ended closed -

Profit & Loss a/c .. dr

to Capital ac

{Reason - As profit has credit balance, so nullifying by debiting it. And, profit increases capital, so capital a/c is credited}

  • In case of net loss, for the year ended closed -

Capital a/c .. dr

to Profit & Loss ac

{Reason - As loss has debit balance, so nullifying by crediting it. And, loss decreases capital, so capital a/c is debited}

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