Closing entries transfer revenue and expense balances to the retained earnings account. This process resets the temporary account balances to zero for the new accounting period. Recording closing ...

At the end of every accounting period, you must close the balances in your sales and expense accounts. You open the income summary account to hold these account balances during the closing process.

Accountants train for many years to avoid making fundamental mistakes such as missing journal entries. Closing entries are journal entries that move balances from temporary income and expense accounts ...