222

$show=home

Welcome to Accounting Education

The Free Online University with 3400+ Accounting contents as study material which can watch, read and learn anyone, anywhere.

Start your studies

$show=home

Why Accounting Education Important


Free
Simple
Have Quality Study Material
Taught by Expert

Connect Vinod Kumar (Educator)

Why Accounting Education Volunteer


Free training
It's educational
It's fun
It helps others

Become Volunteer Teacher

How to Pass Closing Journal Entries


Closing journal entries are helpful for closing the accounts in any financial year of any organisation. These entries are relating to revenue, expenses and drawing because next financial year, we have to open these account with zero balance.


1. To Pass the Journal Entries to Close the Revenue Accounts 

To close the revenue accounts are necessary because we have earned the amount, so, we can use it for our business. No one can ask for same money. It can be used for business promotion. Now, you should pass the following journal entries.

Respected Revenue account Debit

Profit and Loss account Credit

There may be lots of revenues. Each revenue account will Debit because we are closing it. When we have started revenue account, we have credited it because it was our gain. Gain will always credit. Now, its account's closing balance will show. But we have to close it. So, we credited profit and loss account. It means, simply total earning are still credit with a new name which will club small and small revenues and credit in profit and loss account with single name. Now, there will no identity of any revenue account in next financial year.

2. To Pass the Journal Entries to Close the Expenses Accounts

To close the revenue accounts are necessary because we have paid same amount and we have gained its service benefit in this year, so, for calculating our net incomes, we need to close all expenses account. No one can demand money in next year because we have proof of payment.  Now, you should pass the following journal entries.

Profit and Loss Account Debit

Respected Expenses Account Credit

There may be lots of expenses. Each expense account will credit in this journal entry  because we are closing it. When we have started expense  account, we have debited for showing expenses in book. Now, we need to close, so all expenses will debited in profit and loss account. That is the reason, we are debiting profit and loss account.


3. To Pass the Journal Entry for Close the Profit and Loss Account 

After find the balance by deducting expenses side from income side in profit and loss account, we will transfer same net profit to capital account. If there is net loss, still, it will transfer to capital account. On this basis, capital account will show correct amount.

If Net profit

Profit and loss account Debit

Capital Account Credit

If Net Loss

Capital Account Debit

Profit and Loss Account Credit


4. To Pass the Journal Entries to Close the Drawing Account 


Our drawing account's balance will be the loss of our business's capital. So, it will be closed by transferring capital account. With this, our capital will decrease. So, capital account must be debited and drawing account will credited with its closing balance amount.

Capital Account Debit

Drawing Account Credit


Example

Following is the example of Closing Entries 


NoteDateAccountDebitCredit

1
March 31Sale Revenue 100,000
Profit and Loss Account100,000
2March 31Profit and Loss Account 50,000
Salaries Expense30000
Internet Expense10000
Domain Hosting Expense5000
Electricity Expense5000







3March 31Profit and Loss Account50000
Capital Account 50000
4March 31Capital Account 10000
Drawing Account 10000

Other People are Also Reading 

COMMENTS


Name

access,2,account,87,accountant,92,Accounting,679,accounting definitions,99,accounting ebook,3,Accounting education,85,accounting procedure,2,accounting process outsourcing,2,Accounting Software,54,advance,3,advertising,6,africa,7,Amalgamation,6,amendments,16,announcements,61,Annuity,2,assets,51,audit,46,auditing,41,Australia,2,B.Com.,22,balance sheet,80,bank,111,Bank reconciliation,12,banking,33,basic accounting,110,BBA,1,benefits,13,best,50,bill,12,black money,3,blog,12,bloggers,7,book keeping,4,bookkeeping,2,Branch Accounting - full tutorial,8,budget,35,Budget variance,13,business,65,businessman,9,CA,29,calculator,4,canada,3,capital,72,capital budgeting,27,career,20,cash,40,cash book,8,cash flow statement,8,Chiense,1,children,13,china,6,class,3,coaching,2,coins,2,college,6,commerce,10,commerce students,7,company,36,computer,9,computer accounting,1,conference,4,Contact vinod kumar,1,Control Your Spending,27,corporate accounting,69,cost,159,cost accounting,194,cost center,8,cost centre,1,CPA,2,credit,18,credit card,10,cs,10,currency,35,data,11,Debit and credit,16,debit cards,1,debt,62,debtor,21,degree,6,depletion,2,depreciation,38,Diwali Messages,12,documents,4,dollar,5,domain,3,Downloads,3,Dubai,1,e-accounting,17,earning,17,education,246,Education Loans,6,email,15,employee,4,EPF,2,ERP,7,euromoney,1,examination,7,excel,17,excise duty,6,expenses,65,facebook,7,factor of loan,1,fans,2,feature,32,fifo,5,FII,4,fiji,1,finacle,1,finance,821,Finance Journal Entries,4,Financial,133,financial accounting,144,fire insurance,3,flickr,2,flow,4,forensic,4,forex,21,formula,8,france,1,fraud,6,free,2,fun,34,function,1,fund,48,GAAP,36,GDP,1,gdr,5,germany,1,gold,7,goodwill,4,goodwill accounting,3,google,34,google apps,3,google apps,1,google base,1,google buzz,1,google calendar,1,Google docs,38,google finance,3,google fusion tables,1,google talk,5,govt.,5,GST,33,guide,85,health,6,Hindi,2,Hindi Language,3,history,3,holding company,3,How to treat FBT in Tally 9,1,HRA,3,ICAI,11,ICAWI,3,ICICI Bank,1,IFRS,10,income,17,income statement,11,Income Tax,7,India,57,indian railway,1,Indonesia,1,inflation,4,inflation accounting,3,infographics,8,information,7,inspiration,175,insurance,14,insurance accounting,2,Intangible,3,interest,26,international,7,Internet,41,Introduction of Tally 9,1,inventory,41,investment,135,investment in Shares,6,invoice,3,IT,1,Japan,1,Job costing,4,journal entries,135,Journal Entries eBook Help,4,Kalculate,1,keyboard,3,kuwait,2,laptop,2,law,4,LBT,1,learning,36,lease,5,lecture,11,ledger,15,leducation,1,Leverage Analysis,7,liabilities,16,lifo,3,linkedin,1,loan,74,logical point,1,loss,5,loss of profit,1,M.Com.,5,m.phil,2,malaysia,3,management accounting,129,manual accounting,4,manufacturing account,1,market,11,marketing,3,mastercard,2,material,13,MBA,14,MCA,1,media,4,migration,2,mobile,9,money,61,ms word,3,ms. excel,14,multi currency in tally 9,1,Multicurrency Accounting,3,mutual fund,30,national security,1,new and sacrifice ratio,1,new york times,1,new zealand,1,news,1,NGO,5,nonprofit-accounting,7,North Georgia Mountains,1,Notification,1,NPV,17,NSE,1,odbc,2,office,10,oman,1,online application,2,online accounting,11,Online Accounting Course,4,otcei,1,pakistan,3,parents,3,Partnership,1,pay pal,3,pdf,4,Personal Finance,6,pie chart,1,pie chart of income,2,pnb,4,podcast,1,ppf,1,presentation,10,price,7,privacy policy,2,prof. vinod kumar,13,profit,24,profit and loss account,11,project management,11,provision,13,purchase,9,puzzles,2,quickbooks,2,Quote,22,quotes,42,quotes of svtuition,1,rating agency,2,ratio analysis,34,RBI,7,readers,13,real estate,13,rectification of errors,11,remote control,2,reports,10,reserves,8,responsibility accounting,4,retirement,2,revenue,3,Revenue reserves,2,review,7,risk,11,rupees,9,salary,5,sale,12,saudi arabia,1,saving,19,sbi,9,scholarship,2,school,1,SEBI,13,security,30,service tax,23,share,20,share trading,15,Shares,16,shri lanka,3,singapore,2,sms,6,social accounting,7,society,5,solution,214,South Africa,1,stock,24,stock exchange,22,structure,6,student,39,students,69,study,21,subsidiary company,2,svtuition,13,swiss bank,2,tally,99,tally 9,8,Tally 7.2,8,Tally 9,42,Tally.ERP 9,59,tanzania,2,tax,94,Tax Accounting,30,TDS,15,teacher,62,teaching,112,technology,33,test,40,testimonial,15,testimonials,15,thailand,1,tips,60,trading,5,trading on equity,2,transaction,7,trend,12,trial balance,13,truthfulness,1,tuition,3,twitter,10,UAE,5,UGC - NET Commerce,13,UK,11,United Arab Emirates,1,university,9,usa,25,valuation,8,VAT,22,Video,34,Voucher and vouching,4,Wealth,8,wikipedia,25,working capital,29,youtube,14,
ltr
item
Accounting Education: How to Pass Closing Journal Entries
How to Pass Closing Journal Entries
https://1.bp.blogspot.com/-E9oTmRSiBsk/Vci3Hn_53TI/AAAAAAAASak/_YggLGVOVmg/s320/cje.PNG
https://1.bp.blogspot.com/-E9oTmRSiBsk/Vci3Hn_53TI/AAAAAAAASak/_YggLGVOVmg/s72-c/cje.PNG
Accounting Education
https://www.svtuition.org/2015/08/how-to-pass-closing-journal-entries.html
https://www.svtuition.org/
http://www.svtuition.org/
http://www.svtuition.org/2015/08/how-to-pass-closing-journal-entries.html
true
2410664366776677676
UTF-8
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete By Home PAGES Contents View All RELATED CONTENTS FOR YOUR LEARNING Topic ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy