chapter 22: closing transfers

Question 1

what is the first step in doing closing transfers?

Answer 1

closing off and transfering the returns close off and transfer sales and pruchases returns to sales and purchases respectively on the side they decrease.

Question 2

what is step 2?

Answer 2

recording, closing off and trasnfering accounts related to trading close off and transfer purchases, carriage inwards, sales and initial stock and final stock to the trading account

Question 3

what’s step 3?

Answer 3

closing off and transfering gross profit, income and expenses to the profit and loss account (gross profit is from the trading account)

Question 4

what is step 4?

Answer 4

closing off and transfering the accounts related to the owner’s equity (drawings and profit and loss which is the net profit or loss)