The Periodic Method of Merchandise Accounting

Part V: Closing Entries


1. Closing Entries for a Merchandise Business
2. Practice Exercises










1. Closing Entries for a Periodic Merchandise Business

back to top

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?

back to top


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.


back to top









Practice Exercises

back to top

Using the worksheet and the blank journal paper template in the file below, produce the closing entries.

Worksheet and template


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:


Accounting Paper



Click below for the answer to the above practice exercise.