2. 1 Process Balance Day Adjustments Process the adjustment Increase or decrease expense or revenue (display the adjusted amount in the list of accounts) Raise the adjustment account (add to the bottom of the list of accounts) Unearned revenue Accrued revenue Prepaid expense or Accrued expenses Complete the General Journal entry
3. 2 Closing Entries Complete the closing entries in the General Journal Debit Revenue/Credit P&L Summary a/c Credit Expense/Debit P&L Summary a/c
4. 3 Calculate Profit/Loss Deduct total expenses from total revenues to determine profit or in some instances loss Complete the double entry in the General Journal If a profit Debit the P&L Summary/Credit Capital If a loss Debit Capital/Credit the P&L Summary
5. 4 Transfer Drawings to Capital Complete a General Journal entry to perform the transfer Debit Capital/Credit Drawings
6. 5 Ledger Complete the following accounts: Profit & Loss Summary Capital and Drawings accounts
7. Income Statement Complete the statement using the expenses and revenues Make sure you use the ‘adjusted amounts’ for expenses and revenues
8. Balance Sheet Complete the balance sheet using the assets, liabilities and owner’s equity for the question Make sure you add the following accounts to the Asset section Prepaid Expenses Accrued Revenues Make sure you add the following accounts to the Liabilities section Accrued Expenses Unearned Revenues
