century 21 accounting © 2009 south-western, cengage learning lesson 22-4 adjusting, closing, and...
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 22-4LESSON 22-4
Adjusting, Closing, and Reversing Entries for a Corporation
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
ADJUSTING ENTRIESADJUSTING ENTRIES page 654
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
CLOSING ENTRY FOR ACCOUNTS CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCESWITH CREDIT BALANCES
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page 655
1. Enter the balance of accounts in the Income Statement credit column as a debit.
2. Enter the total of the debit entries as a credit to Income Summary.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
CLOSING ENTRY FOR ACCOUNTS CLOSING ENTRY FOR ACCOUNTS WITH DEBIT BALANCESWITH DEBIT BALANCES
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page 656
3. Enter the total of the credit entries as a debit to Income Summary.
2. Enter the balance of every account in the Income Statement debit column as a credit.
1. Enter the account title Income Summary.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
CLOSING ENTRY TO RECORD CLOSING ENTRY TO RECORD NET INCOMENET INCOME
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page 657
2. Credit Retained Earnings.
1. Debit Income Summary.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
CLOSING ENTRY FOR DIVIDENDSCLOSING ENTRY FOR DIVIDENDS
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page 657
2. Credit Dividends.
1. Debit Retained Earnings.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
REVERSING ENTRIESREVERSING ENTRIES
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page 658
113. Reverse the entry that
created a balance in Federal Income Tax Payable.
2. Reverse the entry that created a balance in Interest Payable.
1. Reverse the entry that created a balance in Interest Receivable.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
(continued on next slide)
ACCOUNTING CYCLE FOR A MERCHANDISING ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATIONBUSINESS ORGANIZED AS A CORPORATION
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page 659
1. Source documents are checked for accuracy, and transactions are analyzed into debit and credit parts.
2. Transactions, from information on source documents, are recorded in journals.
3. Journal entries are posted to the accounts payable, accounts receivable, and general ledgers.
4. Schedules of accounts payable and accounts receivable are prepared from the subsidiary ledgers.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 22-4
9. Reversing entries are journalized and posted to the general ledger.
ACCOUNTING CYCLE FOR A MERCHANDISING ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATIONBUSINESS ORGANIZED AS A CORPORATION
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page 659
5. A work sheet, including a trial balance and an adjustment for federal income tax expense, is prepared from the general ledger.
6. Financial statements are prepared from the work sheet.
7. Adjusting and closing entries are journalized from the work sheet and posted to the general ledger.
8. A post-closing trial balance of the general ledger is prepared.
(continued from previous slide)