Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Closing Entries

Financial Accounting

3. Accrual Accounting Concepts

Closing Entries

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is the last step in the business operating cycle?

Posting transactions to the ledger

Preparing the trial balance

Recording adjusting entries

Preparing closing entries to transfer balances to retained earnings

Previous problemNext problem

Verified step by step guidance

Understand the business operating cycle: The business operating cycle refers to the sequence of activities a company undertakes to record, summarize, and report financial transactions during an accounting period.

Review the steps in the accounting process: These typically include identifying transactions, recording journal entries, posting to the ledger, preparing the trial balance, recording adjusting entries, and preparing financial statements.

Recognize the purpose of closing entries: Closing entries are made at the end of the accounting period to transfer temporary account balances (e.g., revenues, expenses, and dividends) to permanent accounts like retained earnings.

Identify the role of closing entries in the cycle: Closing entries ensure that temporary accounts are reset to zero for the next accounting period, allowing the company to start fresh with its financial records.

Conclude that preparing closing entries is the final step: After all other steps in the accounting process are completed, closing entries are prepared to finalize the accounting cycle and transfer balances to retained earnings.