At the end of every accounting period, you must close the balances in your sales and expense accounts. You open the income summary account to hold these account balances during the closing process.

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 ...

Financial records don’t just “end” when the fiscal year does. Companies often have a variety of accounts still open and active. To “close the books” on the period and establish the baseline for the ...

If you are looking to keep your business organized and profitable, bookkeeping plays a huge role. To flourish in business, you must have a substantial knowledge of financial management, no matter how ...