LESSON 8-1

CENTURY 21 ACCOUNTING © Thomson/South-Western

LESSON 8-1LESSON 8-1

Recording Adjusting Entries

CENTURY 21 ACCOUNTING © Thomson/South-Western

2

LESSON 8-1

ADJUSTING ENTRY FOR SUPPLIESADJUSTING ENTRY FOR SUPPLIES page 202

CENTURY 21 ACCOUNTING © Thomson/South-Western

3

LESSON 8-1

ADJUSTING ENTRY FOR PREPAID ADJUSTING ENTRY FOR PREPAID INSURANCEINSURANCE page 204

CENTURY 21 ACCOUNTING © Thomson/South-Western

LESSON 8-2LESSON 8-2

Recording Closing Entries

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5

LESSON 8-2

NEED FOR THE INCOME SUMMARY NEED FOR THE INCOME SUMMARY ACCOUNTACCOUNT page 207

CENTURY 21 ACCOUNTING © Thomson/South-Western

6

LESSON 8-2

(Debit to close)

CLOSING ENTRY FOR AN INCOME STATEMENT CLOSING ENTRY FOR AN INCOME STATEMENT ACCOUNT WITH A CREDIT BALANCEACCOUNT WITH A CREDIT BALANCE page 208

CENTURY 21 ACCOUNTING © Thomson/South-Western

7

LESSON 8-2

(Credit to close)

CLOSING ENTRY FOR INCOME STATEMENT CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCESACCOUNTS WITH DEBIT BALANCES page 209

CENTURY 21 ACCOUNTING © Thomson/South-Western

8

LESSON 8-2

(Income Summary:debit to close)

(Capital: credit torecord net income)

CLOSING ENTRY TO RECORD NET INCOME CLOSING ENTRY TO RECORD NET INCOME OR LOSS AND CLOSE THE INCOME OR LOSS AND CLOSE THE INCOME SUMMARY ACCOUNTSUMMARY ACCOUNT page 210

CENTURY 21 ACCOUNTING © Thomson/South-Western

9

LESSON 8-2

(Credit to close)

CLOSING ENTRY FOR THE OWNER’S CLOSING ENTRY FOR THE OWNER’S DRAWING ACCOUNTDRAWING ACCOUNT page 211

CENTURY 21 ACCOUNTING © Thomson/South-Western

LESSON 8-3LESSON 8-3

Preparing a Post-Closing Trial Balance

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11

LESSON 8-3

GENERAL LEDGER ACCOUNTS AFTER GENERAL LEDGER ACCOUNTS AFTER ADJUSTING AND CLOSING ENTRIES ADJUSTING AND CLOSING ENTRIES ARE POSTEDARE POSTED page 213

When an account has a zero balance, lines are drawn in both the Balance DEBIT and Balance CREDIT columns.

CENTURY 21 ACCOUNTING © Thomson/South-Western

12

LESSON 8-3

POST-CLOSING TRIAL BALANCEPOST-CLOSING TRIAL BALANCE page 216

CENTURY 21 ACCOUNTING © Thomson/South-Western

13

LESSON 8-3

ACCOUNTING CYCLE FOR A SERVICE ACCOUNTING CYCLE FOR A SERVICE BUSINESSBUSINESS page 217

22

33

44

5566

11

77

88

8. Prepare post-closing trial balance

7. Post adjusting and closing entries

6. Journalize adjusting and closing entries

5. Prepare financial statements

4. Prepare work sheet3. Post2. Journalize1. Analyzes transactions