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.

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 ...

Businesses have two options when accounting for inventory -- perpetual and periodic. In a perpetual inventory system, inventory is updated after each sale and purchase transaction through a series of ...