Posting Closing Entries and Preparing a Post-closing Trial Balance: Introduction
The ultimate aim of every business organization is to earn a profit. The success or failure of this can be revealed by preparing an Income Summary account. The income summary account summarizes the revenue and expenses for an accounting period and is used only at the end of the accounting period.
The next Step in the closing process is to journalize and post the closing entries to the general ledger account. The posting procedure is the same as for any other general journal entry, with one exception: the words 'Closing Entry' are written in the Description Column of the general ledger account.
This section will introduce you to the eighth and ninth steps of the accounting cycle. It will describe the steps to post closing entries to the general ledger and prepare a post closing trial balance.
The final part of this section defines the key terms used. Short questions, fill in the blanks, and multiple choice questions are given to test your reading and understanding.
