Closing entries

 Closing entries main wo tamam accounts aaty hain jo k income statement main aaty hain yani expenses and revenue/ income. Sary expense and income account close hojaty hain closing entries main.

Entries


1. Expense and revenue summary Dr (amount total credit ka jo hoga wo ayega)
Opening inventory Cr
Sales return Cr
Sales discount Cr
Purchase Cr
All Expenses incurred + payable Cr
(To closed opening inventory and all expenses accounts)

2. Ending inventory Dr
Sales revenue Dr
Purchase return Dr
Purchase discount Dr
Commission income Dr
All income earned received + receivable Dr
Expenses and revenue summary Cr (amount jo debit side ka total hoga wo ayega)
(To closed all ending inventory and all income accounts)

Agar expense and revenue summary account ki credit side ziada ho 2nd entry mai tou net income hai aur entry ye hogi:
3. Expense and revenue summary Dr
Owners capital Cr
(Net income transfered to owners capital account)

Agar expense and revenue summary account ki debit side ziada ho 1nd entry mai tou net loss hai aur entry ye hogi:
3. Owners capital Dr
Expense and revenue summary Cr
(Net loss transfered to owners capital account)

4. Owners Capital Dr
Owners Drawing Cr
(To closed owners drawing account)