Closing Entries Definition - What are Closing Entries?

Closing entries definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Closing entries can be defined as: Entries recorded at the end of each accounting period to transfer end-of-period balances in revenue, gain, expense, loss, and withdrawal (dividend for a corporation) accounts to the capital account (to retained earnings for a corporation). The closing process happens at the end of the accounting cycle after financial statements are created the temporary account needing to be closed out so that the new accounting process can start. The closing process will close out temporary accounts, temporary account including income statement accounts and the draws accounts. The reason temporary accounts need to be closed is that they report how the company is doing over time. Once the time period has ended these accounts need to be adjusted to zero, or closed out, so that the new time period can start.
Why Learn Accounting - Financial Accounting / Managerial Accounting
101 Double Entry Accounting System Explained - Accounting Equation
101 Cash vs Accrual - Cash Method / Accrual method differenc
101 Revenue Recognition Principle
Double Entry Accounting System Explained - Balance Sheet
101 Income Statement Introduction
101 Accounting Objectives - Relevance Reliability Comparability
101 Transaction Rules - Accounting Equation
101 Transaction Throught Process / Steps - Accounting Equation
101 Owner Deposits Cash Transaction Accounting Equation
101 Work Completed for Cash Transaction Accounting Equation
100.110 Pay Employee with Cash Transaction Accounting Equati
200 Debits & Credits Normal Balance - Double Entry Accounting Sy
200 Debits & Credits - One Rule to Rule Them All