Closing Journal Entries

For Sole Proprietorship or Partnership

MJC Revised 5/2012 Page 1

DESCRIPTION

Journal Entry

Account Titles Dr Cr

REVENUES:

CLOSE ALL REVENUES TO INCOME SUMMARY

Fees Earned XXX

Income Summary XXX

EXPENSES:

CLOSE ALL EXPENSES TO INCOME SUMMARY

Income Summary XXX

Salaries Expense XXX

Supplies Expense XXX

Rent Expense XXX

Insurance Expense XXX

Interest Expense XXX

Depreciation Expense XXX

INCOME SUMMARY: Options 1 or 2

CLOSE THE BALANCE OF THE INCOME SUMMARY ACCOUNT INTO OWNER’S EQUITY WHEN IT IS A NET INCOME (CREDIT BALANCE)

Income Summary XXX

Owner’s Name, Capital XXX

CLOSE THE BALANCE OF THE INCOME SUMMARY ACCOUNT INTO OWNER’S EQUITY WHEN IT IS A NET LOSS (DEBIT BALANCE)

Owner’s Name, Capital XXXX

Income Summary XXX

DIVIDENDS:

CLOSE DIVIDENDS INTO OWNER’S EQUITY ACCOUNT.

Owner’s Name, Capital XXX

Owner’s Name, Withdrawals XXX