Leaning Online

Sales Account The first closing entry for a retail business or a merchandising business will include “Sales” as in the Closing Entry Process , the first closing entry includes all of the Revenue Accounts which are closed to Income Summary Account . To close sales account to income summary account, the following Sales Revenue Closing Entry is recorded as shown below:                                                                   Sales a/c  XXX                                                                                         Income Summary Account a/c  XXX                                                    (Sales Revenue Account Closed To Income Summary Account)

After The Second Closing Entry Is Posted Income Summary Is Equal To What? After Posting The Second Closing Entry To The Income Summary Account , The Balance Will Be Equal To Net Income or Net Loss for the period, otherwise, income summary account is not calculated accurately and correctly and there are errors and mistakes in the calculation. The first entry closes all of the Revenue Accounts to income summary account and the second entry closes all of the Expense Accounts to income summary account and the difference between revenue accounts and expense accounts or the difference of credit side and debit side of income summary account shows either Net Income Or Net Loss for the period. First Closing Entry (To Close Revenue Accounts)                                                   Revenue Accounts a/c  XXX                                                                                         Income Summary Account a/c  XXX                                              

The journal entry to record for admission fees received in cash for Rs. 25000 resulted in the debit to Cash Account and the credit to Admission Fees Received Account or Service Revenue Account as shown below:                                                                     Cash a/c  25000                                                                                         Service Revenue a/c  25000                                                         (Service Revenue Earned For Cash During the Period) Cash as a current asset is increased, so we debit it while service revenue as a Direct Revenue is also increased, so we credit it. Received Cash For Admission Fees Accounting Equation                                                      Assets      =        Liabilities     +               Equity                                                      +Cash       =                -              +     (+Service Revenue)