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Accounting Ch 10
Adjusting & Closing Entries
Term | Definition |
---|---|
adjusting entries | Journal entries recorded to update general ledger accounts at end of fiscal period |
1st Adjusting Entry | Entry that uses accounts Supplies Expense and Supplies |
2nd Adjusting Entry | Entry that uses accounts Insurance Expense and Prepaid Insurance |
Permanent accounts | accounts used to accumulate information from one fiscal period to the next one. |
Temporary accounts | Accounts used to accumulate information until it is transferred to owner's capital account |
Closing Entries | Journal entries used to prepare temporary accounts for a new fiscal period |
A temporary account | Income Summary |
Word to remember Closing Entries | SEND |
Post-closing Trial Balance | A trial balance prepared after the closing entries are posted |
Accounting cycle` | series of accounting activities included in recording financial information for a fiscal period |