Question

Below is Lashburn Ltd.’s summarized income statement for the year ended August 31, 2016, its first year in business.


a. Prepare a spreadsheet and make the entries necessary to close the temporary accounts.
b. Prepare the journal entry necessary to close the temporary accounts.
c. Explain why closing entries are necessary and when they should be recorded.
d. What would be the effect on net income in 2017 if Lashburn Ltd. forgot to prepare a closing entry in2016?


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  • CreatedFebruary 26, 2015
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