Below is a link that contains the steps for the closing process. As noted in the lecture, there are four steps in performing the closing process. This process is a necessary aspect of the Accounting Cycle and is performed to zero out temporary accounts and to begin the preparation of the financial statements for the next Accounting Cycle.

• Choose one of the steps in journalizing the closing entries (see Closing Entries-Diagram below) and comment as follows;
  • Define a step and the purpose of that step
  • What would occur if this step was missed as part of the closing process?
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Step 2: Close Expense Accounts Step 1: Close Revenue Accounts Step 3: Close Income Summary Account Net Income or Net Loss Step 4: Close Withdrawals Account Capital