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