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Income Summary
Salaries Expense
Depreciation Expense
Utilities Expense
Interest Expense
Advertising Expense
Supplies Expense
Insurance Expense
(To close expense accounts)
Retained Earnings
Income Summary
(To close net loss to retained earnings)
Retained Earnings
Dividends
(To close dividends to retained earnings)
PLUS
required steps in the accounting cycle are: (1) analyze business transactions, (2) journalize the transactions, (3) post to
ledger accounts, (4) prepare a trial balance, (5) journalize
and post adjusting entries, (6) prepare an adjusted trial
balance, (7) prepare financial statements, (8) journalize
and post closing entries, and (9) prepare a 'post-closing
trial balance.
5 Explain the approaches to preparing correcting entries.
One way to determine the correcting entry is to compare the
incorrect entry with the correct entry. After comparison, the
company makes a correcting entry to correct the accounts.
An alternative to a correcting entry is to reverse the incorrect entry and then prepare the correct entry.
6 Identify the sections of a classified statement of financial position. A classified statement of financial position
n
PLUS
GLOSSARY
Classified statement of financial position A statement of
Correcting entries