At the end of an accounting period, certain accounts are closed so they have a zero balance at the beginning of the new accounting period. The act of zeroing these accounts is called closing entries.

Closing entries transfer revenue and expense balances to the retained earnings account. This process resets the temporary account balances to zero for the new accounting period. Recording closing ...

Businesses have two options when accounting for inventory -- perpetual and periodic. In a perpetual inventory system, inventory is updated after each sale and purchase transaction through a series of ...

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle. Khadija Khartit is a strategy, ...