Part V: Closing Entries
| Contents: |
| 1. Closing Entries for a Merchandise Business |
| 2. Practice Exercises |
1. Closing Entries for a Periodic Merchandise Business
If you recall, we are examining the changes in the accounting cycle between
a service business, and a merchandise
business.
We are at the last highlighted step shown below:
In this lesson, we have only to finish off the accounting cycle by learning
how to perform the closing
entries for a merchandise business.
How do Closing Entries Differ?
To be honest, there’s really almost no difference in the process with one exception: because the Merchandise Inventory account is not touched during the accounting period, it has the beginning inventory balance inside.
Closing entries is the step at which we remove the beginning balance, and enter the current, end of period balance.
When you’re ready, click the ‘Next’ button below for further explanation.
Practice Exercises
Using the worksheet and the blank journal paper
template in the file below, produce the closing entries.
NOTE: If you prefer, you can do it by hand. You can print out your own accounting paper at any time by using this file:
Answers
Click below for the answer to the above practice exercise.