Completing the Accounting Cycle

4 Pages
Unlock Document

University of Toronto Scarborough
Financial Accounting
Liang Chen

Completing the Accounting Cycle Adjusting Entry The merchandise inventory account balance should equal the cost of the merchandise on hand at all times. A physical inventory count adds an important control feature to the perpetual inventory system If inventory errors have occurred, or if inventory has been stolen or damaged, it is important that management be aware of this at an early stage so that preventive control can be put in place To adjust for inventory shortage, cost of goods sold is debited and merchandise L3;03947L8.70L90 ;039K4:JK9KL8L3;03947K,839-00384OL3;03947O48808 are part of the cost of the goods Closing Entries Similar to service businesses, all temporary accounts are closed at the end of the accounting cycle Sales is debited, expenses are credited, and drawings are debited Sales returns and allowances and cost of goods sold are credited Post-Closing Trial Balance Similar to the service business, post-closing trial balance is simply to ensure that the debits and credits equal each other Summary of Merchandising Entries
More Less

Related notes for MGAB01H3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.