B. liability and capital. The pre-closing balances cannot be changed in GTAS. what is the purpose of closing entries? The purpose of making closing entries is to: A. What accounts are affected when preparing closing entries? Examples of Closing Entries. What is the purpose of closing entries? The purpose of closing entries is to prepare the temporary accounts for the next accounting period. B. a credit. Two examples of closing entries are: The closing of the income statement accounts (revenues, expenses, gains, losses) by transferring their balances to the owner's capital account or the corporation's retained earnings account. This is done after the company's financial statements for the year have been prepared. Their purpose is to clear out balances in temporary accounts by transferring them to permanent accounts. B. ---Revenues accounts with credit balances are closed by debiting them i view the full answer Closing entries: The journal entries prepared to close the temporary accounts to capital account are referred to as closing entries. a) Describe the nature of Closing Entries. 1. In other words, temporary accounts are reset for the recording of transactions for the next accounting period. The expense accounts and withdrawal accounts will now also be … The preparation of closing entries is a simple four step process which is briefly explained below: Step 1 – closing the revenue accounts: Transfer the balances of all revenue accounts to income summary account. By doing so, companies move the temporary account balances to the permanent accounts of the balance sheet. Closing entries are manual journal entries at the end of an accounting cycle to close out all the temporary accounts and shift their balances to permanent accounts. A. a debit. C. Establish new … C. either a debit or a credit. Closing entries are very important parts of the accounting cycle. b) For each of the following accounts, indicate whether it is closed at the end of the year: a) Salaries Expense A. asset and liability. It is done by debiting various revenue accounts and crediting income summary account. Debit Revenue (Sales, rent revenue), Credit Retained Earnings … I.e. Without proper journal entries, companies’ financial statements would be inaccurate and a complete mess. Answers Purpose of Closing Entries: ---The basic purpose is to close various revenues and expenses account at the end of period. A closing entry is a journal entry Journal Entries Guide Journal Entries are the building blocks of accounting, from reporting to auditing journal entries (which consist of Debits and Credits). The closing entries are the journal entry form of the Statement of Retained Earnings. C. revenue and expense. The closing process reduces revenue, expense, and dividends account balances (temporary accounts) to zero so they are ready to receive data for the next accounting period. D. expense and capital Question 2 of 20. Enable the accountant to prepare financial statements at the end of the accounting period. To start the next accounting period with a zero balance for the revenue and expense accounts. The pre-closing unexpended balances provided through GTAS agree with the ending balances shown on the CARS/GWA Account Statement for September. Accountants may perform the closing process monthly or annually. After the closing entries are posted to the ledger, each expense account will have _____ balance. The process of preparing closing entries. Closing Entries based accounting question. One purpose of closing entries is to give zero balances to _____ accounts. Prepare revenue and expense accounts for the recording of the next period's revenue and expenses. 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