See Answer. To close the account, credit it for $50 and debit the owner's capital account for the same amount. Click to see full answer Besides, what accounts are affected by closing entries? What two purposes are accomplished by recording closing entries? The expense accounts and withdrawal accounts will now also be zero. In a partnership, separate entries are made to close each partner's drawing account to his or her own capital account. Cash in bank Accounts receivable Supplies Equipment Accounts payable James Brown, Capital James Brown, Withdrawals Income Summary Cleaning Fees Maintenxe expense Rent expense … In my accounting class, they gave me a test and the teacher is terrible so i dont know how to do anything. Examples of Closing Entries. 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. Experts are waiting 24/7 to provide step-by … Check out a sample Q&A here. Closing entries are based on the account balances in an adjusted trial balance.. Closing entry 4: Mr. Green's drawing account has a $50 debit balance. Only revenue, expense, and dividend accounts are closed—not asset, liability, Common Stock, or Retained Earnings accounts.The four basic steps in the closing process are: Closing the revenue accounts—transferring the credit balances in the revenue accounts to a clearing account called Income Summary. 1.Prepares the accounts affected by closing entries by giving them a balance of 0. ... it'll have to be credited in the closing entries. Required: Using above trial balance, prepare closing entries required at December 31, 2015. 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). Closing entries: Closing entries are entries which are passed to close temporary accounts at the end of the year. Accounts which are in category of personal and real natures such as assets liability and relates to owner equity are unaffected from the closing entry. Example. The question is "indicate wether each account is affected by a closing entry. check_circle Expert Answer. Want to see this answer and more? Want to see the step-by-step answer? What accounts are not affected? After preparing the closing entries above, Service Revenue will now be zero. When the end of the accounting period arrives, closing entries are recorded where accounting information in temporary accounts is summarized and transferred over to permanent accounts. The balances of these accounts have been absorbed by the capital account – Mr. Gray, Capital, which now has a balance of $7,260 ($13,200 beginning balance + $1,060 in step #3 - $7,000 in step #4). What is a Closing Entry? What accounts are affected by closing entries? Most closing entries involve revenue and expense accounts. "Yes or No". Without proper journal entries, companies’ financial statements would be inaccurate and a complete mess. Temporary accounts are account which starts from zero at the start of the year records current year’s events and then are zeroed at the end of the year by passing closing entries. 2. The Business Consulting Company, which closes its accounts at the end of the year, provides you the following adjusted trial balance at December 31, 2015.. You will learn what closing entries are, what accounts are affected, and how they are made. Temporary accounts include: Revenue, Income and Gain Accounts; Expense and Loss Accounts 2. to update the owners capital account for the previous period Closing entries are journal entries made at the end of an accounting period which transfer the balances of temporary accounts to permanent accounts. 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