Accounting 2

Card Set Information

Author:
LindaGibbins
ID:
275170
Filename:
Accounting 2
Updated:
2014-05-23 13:12:16
Tags:
Income Summary
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Description:
Income Summary definition and steps
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  1. What is Income Summary?
    A temporary account in the ledger that summarizes Revenue and Expenses and transfers its balance to Capital.
  2. What are the Income Summary Steps
    • 1.  Clear Revenue balances and transfer to Income Summary
    • 2.  Clear individual Expense balances and transfer to Income Summary
    • 3.Clear balance in Income Summary (net income) and transfer to Capital
    • 4.  Clear Withdrawals balance and transfer it to Capital.
  3. Accumulated Amortization is a Contra-Asset account with a credit balance

    Amortization Expense  ∧  DR
    Accumulated Amortization  ∧ CR
    Formula for Accumulated Amortization equation:

    • Cost of Equip - Residual Value
    •            Years/Months
  4. How to replenish Petty Cash Fund
  5. Here are closing entries for Income Summary

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