NUTR 343 Lecture Notes - Lecture 4: Gross Margin, Capital Account, Income Statement

• School: McGill University
• Department: Nutrition and Dietetics
• Course: NUTR 343
• Professor: Steven Landry

Document Summary

We complete the accounting cycle in this chapter. The most important issue in this chapter is called closing . Usually each month businesses will close the month. The process really involves the actions of getting ready for the next month. Since revenues and expenses are period items, we want to start these over each month. For example we would ask how much revenue i earned for the month of november. If we didn"t make an adjustment to the revenue and expense accounts at the end of the month, it would be very difficult to say how much was earned in december. Closing is very easy relative to chapters 2 and 3. If a revenue or expense account has any value except zero, you need to adjust the account to zero. If there is a credit balance, you need to debit the account to make the account equal to zero.