Accounting Phase 3 db



Accounting Phase 3 db

Closing entries

Closing entries are journal entries that are made at the end of the company's accounting period. These entries are made to transfer data from temporary accounts to the permanent accounts (such as income statements or balance sheet accounts).

What are the reasons for closing entries?

The reason that journal entries are closed is due to two factors. The first factor is to bring the temporary journal account balances to zero so that in the next accounting period accounts balances are nil. The other reason is that retain earning of the company would engross ...