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Year End Closing Entries and Correcting Entries (1)

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Ayobami
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25 views13 pages

Year End Closing Entries and Correcting Entries (1)

Uploaded by

Ayobami
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Expense

31-Dec Balance Brought Down $ 150,000.00 Income Summary

$ -

Revenue

Income Summary $ 200,000.00 Balance Brought Down

$ -

Drawings

31-Dec Balance Brought Down $ 10,000.00 Capital

$ -
$ 150,000.00

$ -

$ 200,000.00 31-Dec

$ -

$ 10,000.00

$ -
Income Summary

Expense $ 150,000.00 Revenue $ 200,000.00


Balance Carry Forward $ 50,000.00

Capital $ 50,000.00 Balance Brought Down $ 50,000.00

$ - $ -

Capital

Drawings $ 10,000.00 Balance Brought Down $ 40,000.00

Balance Carry Forward $ 80,000.00 Income Summary $ 50,000.00

Balance Brought Down $ 80,000.00 Jan 1 2024


Date

4
Description Debit Credit

To close out expense account for the year

Income Summary $ 150,000.00


Electricty Expense $ 20,000.00
Rent Expense $ 45,000.00
Hydro Expense $ 30,000.00
Supplies Expense $ 5,000.00
Repair Expense $ 10,000.00
Insurance Expense $ 10,000.00
Maintenance Expense $ 20,000.00
Fuel Expense $ 10,000.00

To close out expense accounts

To close out revenue account for the year

Revenue $ 200,000.00
Income Summary $ 200,000.00

To close out revenue account

Input income summary to Capital to close out

Income Summary $ 50,000.00


Capital $ 50,000.00

To close out income summary

To close out Drawings account for the year

Capital $ 10,000.00
Drawings $ 10,000.00
Date Description

1 Accounts Receivable
Revenue

Customer promised to pay next month - Right Entry

2 Cash
Accounts Receivable

Wrong Entry

How will I fix the entry?

1 Reverse the incorrect entry

Accounts Receivable
Cash

Reversing The wrong entry from Transaction #

2 Post the correct entry in its place

Accounts Receivable
Revenue

A/R entry from Transaction # corrected

3 Combining Entries for 1 Correcting Entry


Accounts receivable
Cash
Revenue

1 Cash
Revenue

Customer paid $150 for barber services

2 Correction Entry

Revenue
Cash

Reduction in revenue because transposition error

2 Steps would be

1 Revenue
Cash

2 Cash
Revenue
Debit Credit

$ 150.00
$ 150.00

$ 150.00
$ 150.00

$ 150.00
$ 150.00

$ 150.00
$ 150.00
$ 300.00
$ 150.00
$ 150.00

$ 510.00 Transposition Error - When you change the place of you


$ 510.00
150

360

$ 360.00
$ 360.00

$ 510.00
$ 510.00

$ 150.00
$ 150.00
u change the place of your numbers

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