What are the two purposes of closing entries

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Week 3 Discussion

  1. What are the two purposes of closing entries? What classifications of accounts are not affected?
  2. What categories of assets and liabilities are shown on a typical classified balance sheet?
  3. The after closing trial balance will include what classifications of accounts?
  4. Explain why you do a trial balance.
  5. In a multiple-step income statement, what elements are presented and in what order?
  6. Explain the difference between a “perpetual” inventory system and a “periodic” inventory system. Name the accounts used in a periodic inventory system but not in a perpetual inventory system?
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