EXERCISE 4-5
| Purpose: | (L.O. 2, 3) This exercise illustrates the preparation of closing entries and discusses their importance. |
The recording and posting of closing entries is a required step in the accounting cycle.
Instructions
Refer to the Solution to Exercise 4-2.
- Prepare the closing entries for Carl's Video Service, Inc. at April 30, 2014.
- Discuss the two reasons why closing entries are prepared.
- Prepare a post-closing trial balance for Carl's Video Service, Inc.
- Explain why a post-closing trial balance is prepared and indicate what type of accounts will appear on the post-closing trial.
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